By Drew Singer
January 29, 2021
Some of the Reddit day-trading crowd’s favorite companies are capitalizing on their newfound popularity by selling shares to raise fresh capital.
American Airlines Group Inc. on Friday announced plans to sell up to $1.1 billion of shares after a 17% climb over the past two sessions amid Reddit chatter about squeezing shorts.What’s moving marketsStart your day with the 5 Things newsletter.EmailSign UpBy submitting my information, I agree to the Privacy Policy and Terms of Service and to receive offers and promotions from Bloomberg.
Also on Friday, pot stock Sundial Growers Inc. erased a premarket surge after announcing a $100 million stock sale at a discount to Thursday’s closing price. Small-cap pharma stock JanOne Inc. also raised equity Friday after shares more than doubled over the past two days in a surge that traders linked to retail speculation. Shares in all three stocks fell on Friday after the deals were announced.
Those share sales follow a $305 million raise by AMC Entertainment Holdings Inc. earlier this week. Traders are expecting even more deals as firms like these seek to repair pandemic-battered balance sheets while demand for shares is high.
The stocks are among those that surged of late as investors continue a relentless buying spree in firms touted on Reddit. More Reddit picks such as GameStop Corp., Express Inc., Bed Bath & Beyond Inc., and Naked Brands Group Ltd may also be on watch for stock offerings after shares further extended runups in on Friday.
AMC is reportedly weighing a second offering, while at least one analyst has called for GameStop to bring a stock sale for “as much as the market can absorb.”
