The funding plan that sent shares of Blue Apron Holdings Inc. surging is likely part of a bigger resurgence in U.S. rights offerings.
Shares in the meal-kit subscription service are up 40% since Wednesday’s announcement that it will raise $78 million — a windfall worth more than half of its market capitalization. The capital will come by way of a rights offering and a pair of private placements. A rights offering is a way to raise equity capital from existing shareholders in proportion to their existing stake.
This alternative to a traditional sale of equity may not be dilutive because shareholders have the option to participate. It’s growing in popularity as companies look to fund their way through the pandemic’s second year. U.S.-listed companies have announced more than $2.5 billion of rights offerings in 2021, according to data compiled by Bloomberg, the most in three years.
