In a highly dilutive cash call on Friday, Saipem’s shares fell below the issue price for new stock, falling short of the $2 billion aim the Italian energy services company sought from investors to strengthen its finances.
Shares traded on the Milan Stock Exchange fell 26.5 per cent, while Saipem sold its fresh shares for 1.01 euros each. After only raising 70 per cent of the intended amount in the capital increase, the firm announced on Friday that underwriting banks had finished the purchase of new shares worth over 600 million euros, which remained unsold.
Banks can sell shares even below the issue price, but they shouldn’t do so excessively because they would lose the fees they received. Banks will now begin selling Saipem shares, but the process could not be straightforward given their position size and current market conditions.
Saipem submitted a new business strategy after receiving an unexpected earnings warning in January, which prompted the company to seek funding from investors.
The turbulence in the global markets caused the largest asset manager in the world, BlackRock Inc., to see a larger-than-anticipated decline in quarterly profit.
Given that a significant portion of fund managers’ revenue is based on market circumstances, the current macroeconomic environment, plagued by concerns about soaring inflation, geopolitical unrest, and rate hikes, has only increased their pressures.
As investors avoid making sizable investments, the U.S. central bank’s continued rate hikes to combat decades-high inflation might hurt asset managers.
Additionally, they must contend with harsh comparisons to last year, when loose monetary policy and affordable borrowing stimulated irrational investment activity.
PNC Financial (PNC) announced second-quarter earnings that exceeded analyst projections while delivering lower sales than anticipated.
According to corporate data released on Friday, Volkswagen Group sales decreased by around 5%, with a sharp decline in Europe is the main contributor. However, sales of battery-electric vehicles were soaring with huge growth.
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