Clover Health Investments Corp. unsettled shareholders in November when the loss-making medical insurer, backed by investor Chamath Palihapitiya, announced a $300 million stock offering. The price of just $5.75 a share was almost two-thirds less than where it traded when joining the stock market at the start of the year.

Clover already had a decent cash pile, but waiting to raise money was risky given “potentially rising interest rates, a potential recession, and a contraction of investor liquidity, leading to a flight from technology-driven growth companies,” management later explained. It had a point: Clover’s stock has since plunged even further amid a massive rout of cash-bleeding technology firms.

As all prudent corporate cash managers know, the best time to raise money is when you don’t currently require it. The window for tech companies to cheaply raise additional funds looks to be rapidly closing—U.S. equity issuance so far in January is a fraction of last year’s pace.

Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.

Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical Treasury & Risk information including in-depth analysis of treasury and finance best practices, case studies with corporate innovators, informative newsletters, educational webcasts and videos, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM websites including PropertyCasualty360.com and Law.com.

Already have an account?


NOT FOR REPRINT

© 2023 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

 

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2023 ALM Global, LLC. All Rights Reserved.