Why Shares of United Airlines Are Falling Today
Shares of United Airlines Holdings (NASDAQ: UAL) fell more than 6% on Wednesday after the airline turned to equity markets to raise $1 billion in additional capital. The sale provides much-needed added liquidity, but United is selling the stock at prices significantly below levels where it was buying the shares last year.
After markets closed Tuesday, United said it would sell 39.25 million shares at $26.50 apiece, with an option for the underwriters to buy an extra 10% based on demand. The sale was completed at a price 5% below the stock's $27.88 at Monday's close.
Airlines have been hit hard by the COVID-19 pandemic, with travel demand off by more than 90% year over year. On Monday, United preannounced a preliminary first-quarter loss of $2.1 billion, well above the $459 million analyst consensus, due in part to a $1 billion special charge tied to a decline in the value of United's investment in Colombia's Avianca Holdings.
Source Fool.com
