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Illustration: Aïda Amer/Axios

The number of U.S. public companies turning to the equity markets to raise cash is at the highest level in at least 10 years, according to data by Dealogic provided first to Axios.

Why it matters: The frenzy comes as companies (battered by the pandemic or not) seize on soaring stock prices to shore up cash.

Flashback: Follow-ons — i.e., equity issuances after a company is already public— slowed to a near halt when the pandemic hit the U.S. in March.

  • But, amid the stock market rebound and as companies’ capital needs skyrocketed, the number of issuances exploded shortly thereafter.
  • In May and June there were 192 of these deals, according to a report last week from RBC Capital Markets. Put another way, more than one-third of all of 2019’s follow-ons were in the span of two months alone.

Driving the news: Tesla said on Tuesday it would issue stock to raise cash for the third time this year.

  • It had raised about $2 billion in February and roughly $5 billion in September.
  • Tesla now plans to raise as much as another $5 billion issuing more stock. Rather than do it all at once, Tesla will sell stock over time at its discretion. (Reminder: Tesla is set to join the S&P 500 in two weeks.)

What they’re saying: Tesla is “raising enough capital to get the balance sheet and capital structure to further firm up its growing cash position and slowly get out of its debt situation,” Dan Ives, a Tesla analyst at Wedbush Securities, wrote in a note to clients on Tuesday.

  • Elon Musk told the Wall Street Journal yesterday: “We thought we can retire debt and increase the security of the company … probably a good thing. And for less than 1% dilution, it probably makes sense. It could have gone either way.”

The big picture: Tesla has taken advantage of the massive run-up in its share price, which is over 9 times higher than a year ago (adjusting for the stock split).

  • Three major airlines — JetBlue, United and American — all said they would raise capital through stock issuances in the last month. Little to no travel demand means these companies are burning millions of dollars per day.
  • Airline stocks rebounded 32% in the past month as it became clear that vaccines would likely start being distributed before year-end, possibly speeding up a return to normal. (The stocks are still down 25% this year.)
Data: Dealogic; Note: Data includes follow-on and convertible bond deals; Chart: Andrew Witherspoon/Axios

How it breaks down: There have been 797 follow-on deals so far this year — a record dating back to at least 2010.

  • There were also 175 convertible bond deals (which Dealogic tracks as equity issuance) — also the highest in at least the past decade.

Go deeper

Dan Primack, author of Pro Rata
Jan 21, 2021 - Economy & Business

Bain Capital preps a very rapid recap

Illustration: Aïda Amer/Axios

Bain Capital is seeking to partially cash out of U.S. LBM Holdings, a Buffalo Grove, Ill.-based building products distributor that it bought just last month. It would be done via a $400 million dividend recap featuring PIK toggle bonds that are expected to price today.

Why it matters: Dividend recaps are private equity at its most rapacious, enriching sponsors at the expense of portfolio company balance sheets. But this one is somehow even more egregious.

Updated 5 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Eniola Odetunde/Axios

  1. Health: Most vulnerable Americans aren't getting enough vaccine information — Fauci says Trump administration's lack of facts on COVID "very likely" cost lives.
  2. Politics: Biden unveils "wartime" COVID strategyBiden's COVID-19 bubble.
  3. Vaccine: Florida requiring proof of residency to get vaccine — CDC extends interval between vaccine doses for exceptional cases.
  4. World: Hong Kong to put tens of thousands on lockdown as cases surge.
  5. Sports: 2021 Tokyo Olympics hang in the balance.
  6. 🎧 Podcast: Carbon Health's CEO on unsticking the vaccine bottleneck.

Trump impeachment trial to start week of Feb. 8, Schumer says

Senate Majority Leader Chuck Schumer. Photo: The Washington Post via Getty

The Senate will begin former President Trump's impeachment trial the week of Feb. 8, Majority Leader Chuck Schumer announced Friday on the Senate floor.

The state of play: Schumer announced the schedule after reaching an agreement with Republicans. The House will transmit the article of impeachment against the former president late Monday.