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How about this… A publicly traded company raises its own money. Let’s give United a round of applause for heading on over to the good people of Barclays and Morgan Stanley and asking them to underwrite some more stock. I’ve been pretty hard on the airlines seeking bailout money, swaps, grants, and whatever free taxpayer money they could get their hands on, but this is what should be happening. Sure, shareholders will get diluted, and the underwriters will the have the ability to purchase almost 4M additional shares which would dilute even more, but companies should seek to finance their own way out of this trough, especially after using cheap money to finance buybacks over the years. Maybe this means they can ride out the storm…It was heavily Intimated that come September they would be laying off employees once Uncle Sam’s money ran dry. You can read more here – now let’s just hope that the bulk of these shares don’t fold into restricted stock awards to the C Suite Execs.
CHICAGO, April 21, 2020 /PRNewswire/ — United Airlines Holdings, Inc. (NASDAQ:UAL) today announced an underwritten public offering of 39,250,000 shares of its common stock, subject to market conditions and other factors. Morgan Stanley and Barclays are acting as the underwriters of the offering. The Company has also granted to the underwriters a 30-day option to purchase up to 3,925,000 additional shares. The proceeds from the offering will be used for general corporate purposes.
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