US Stock Selldowns Ramp Up as Election Results Fuel Market Rally
(Bloomberg) -- Some of corporate America’s largest investors are taking advantage of the stock market rally by selling down stakes in companies they own, especially after the US presidential election.
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Since Nov. 5, sales of existing shares in already-listed companies have reached more than $4 billion, according to data compiled by Bloomberg.
The rush of transactions included General Electric Co’s aerospace unit offering a $1.2 billion block of GE HealthCare Technologies Inc. shares, as well as American International Group Inc. selling $936 million worth of Corebridge Financial Inc. shares and a group of private equity investors selling $735 million worth of Clearwater Analytics Holdings, Inc. shares.
The flurry of deals shows investors capitalizing on soaring stock prices, a trend that picked up pace after Donald Trump won control of the White House again. With traders betting that his policies will keep fueling corporate profits, the S&P 500 Index gained 3.5% between closing prices on Election Day and Tuesday, hitting its 51st record this year at one point.
“Issuers and financial sponsors were waiting for a window of opportunity after the third-quarter earnings, US presidential election and the Federal Reserve’s meeting to monetize some of their holdings,” said Steve Parish, co-head of ICR Capital. Two days after the election, the Fed announced another interest rate cut to curb inflation, a move that boosted optimism about the economy.
Roughly $68 billion has been raised through selldowns so far this year, outpacing $43.8 billion raised during the same period in 2023.
In one of the largest selldown following the US election, GE Aerospace offered 13 million shares of GE HealthCare in a $1.2 billion debt-for-equity exchange with its lender Morgan Stanley. It marks the fifth selldown GE HealthCare since 2023.
Meanwhile, AIG sold 30 million shares of Corebridge Financial, which provides retirement and insurance products, on Nov. 7, and three PE investors — Welsh, Carson, Anderson & Stowe, Warburg Pincus and Permira Advisers — offered 25 million shares of Clearwater, an investment accounting software company this week.
“The window ahead of Thanksgiving was always going to be busy but with the market rallying, transactions are getting accelerated,” said Daniel Polsky, William Blair & Co.’s syndicate co-head. “We expect things to stay active through year-end.”
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