Illustration: Aïda Amer/Axios
All companies want to be cash-rich — and as big as possible — heading into an era of extreme uncertainty.
The big picture: Companies raised an astonishing $287 billion through bond issuance between March 17 and April 3 alone. That's more than they raised in the entire second quarter of last year.
Slack didn't raise any money when it went public in a novel direct listing. But being a public company certainly helped Slack this week, when it easily raised $750 million in a convertible bond deal that could end up being as big as $862 million.
- Slack, which lost $588 million last year and expects to lose money this year too, is paying just 0.5% on the bonds. Investors can also make money if the share price rises above $31 per share.
- The stock is currently trading just below $25, after rallying from a low point of $15 last month.
- Airbnb similarly raised $1 billion this week, but because of its industry and its private status, it had to accept much worse terms.
What to watch: Private companies are trying to get big enough to survive through M&A. Often the transactions are mostly or entirely in stock, to help conserve precious cash.