Money losers turn to the stock market

Companies that are already public and losing money are using the current stock frenzy to raise cash, said Lu Wang and Vildana Hajric in Bloomberg.com. “Almost 750 moneylosing firms have sold shares in the secondary market” in the past 12 months. They outnumber stock offerings from profitable companies by 2 to 1, the biggest margin since at least 1982. While many companies are unprofitable at the initial public offering, older companies that have been losing money for years—such as AMC and GameStop—going back to sell more shares represent a new trend. Analysts “warn that the flood of shares coming from money losers is becoming extreme” and could represent “a bad omen for the market.”