Mar 31, 2019

A seller's market: Lyft is the latest oversubscribed IPO

Illustration: Sarah Grillo/Axios

Lyft raised $2.34 billion on Thursday in an IPO that was 20 times oversubscribed. In other words, the underwriters received about $47 billion of orders for Lyft shares — more than double the market capitalization of the entire company.

The Levi Strauss IPO, last week, was 10 times oversubscribed. A raft of other IPOs could raise as much as $100 billion on U.S. markets alone this year. Uzbekistan's recent global bond offering was more than 5 times oversubscribed, and came on the heels of a similar bond from Tajikistan, which was 8 times oversubscribed.

Where's the money coming from? In a word, buybacks. So far this year, U.S. companies have spent $253 billion buying back their own stock from investors. Most of those investors don't want to exit the stock market entirely, so they need to reinvest the proceeds elsewhere. IPOs are one of the few areas that companies are actually asking for new equity capital.

Be smart: Underwriters have every incentive to exaggerate the amount of demand they receive for their offerings. And once a deal is oversubscribed, many investors will artificially inflate their orders, in the knowledge that their final allocation will end up being scaled back. Still, much of the demand is real — and is likely to remain elevated as long as American companies continue to flood investors with cash.

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Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens.

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Democrats demand new Russia sanctions over 2020 election interference

Putin and Trump. Photo: Kremlin Press Office/Handout/Anadolu Agency/Getty Images

Senate Democratic leaders will send a letter to Secretary of State Mike Pompeo and Treasury Secretary Steven Mnuchin on Monday afternoon demanding they sanction Russia — and potentially Russian President Vladimir Putin himself — for attempting to influence the 2020 presidential election.

Why it matters: The letter follows reports that a senior intelligence official briefed Congress that Russia is again interfering in the November election to help Trump. White House national security adviser Robert O'Brien repeatedly rejected that assessment on Sunday, and CNN later reported that the briefer may have overstated the intelligence community's evidence about Russia's goals.