Struggling firms follow AMC’s lead and try to raise money through stock offerings as day traders reinvent the market

• Express, Peabody and Transocean seek help from stock markets amid retail frenzy.
• Equities have all risen this year despite industry headwinds and debt.
• “Feed the ducks while they croak,” says a source.
• See more stories on Insider’s company page.

Several struggling companies are follow in the footsteps of AMC Entertainment and seeking help from stock investors amid the retail frenzy.

The companies, including Columbus, Ohio-based clothing retailer Express, Swiss deep-water drilling contractor Transocean and St. Louis, Missouri-based coal producer Peabody, have all announced plans to sell more shares this month, even as they struggle against headwinds from the global economy. industry and heavy debt.

The moves follow the retailer’s favorite AMC Entertainment. Director Adam Aron has captured the interest of retail investors in the company in light of the company’s new status as a meme stock.

The movie theater chain, which has flirted with bankruptcies in the past, has raised money so far this year through multiple stock offerings in an effort to raise new money and strengthen its balance sheet. It is now seeking shareholder approval for another stock offering.

There’s a lot of “foam” in the market, Matt Maley, chief market strategist for Miller Tabak + Co., recently told Insider when talking about the meme stock craze driven by retailers on social media forums like Reddit.

This year alone, retailers are expected to pump a net $400 billion into the stock markets, on top of last year’s $367 billion and net negatives from the previous two years, according to Goldman Sachs research.

In light of the retail frenzy, it “makes a lot of sense” that ailing companies would take capital from the stock markets if possible, according to Scott Hartman of asset manager Vrde Partners, according to the Wall Street Journal. who first reported the story.

Steve Sosnick, chief strategist at Interactive Brokers, said a popular old phrase among investors to “feed the ducks while they croak” applies as private investors have pushed for speculative stocks.

Clothing retailer Express plans to offer up to 15 million additional shares of common stock. The company has almost 400% collected this year, despite reporting a $405 million loss for 2020 after the COVID-19 pandemic shut down storefronts.

Meanwhile, Peabody, which emerged from bankruptcy in 2017, plans to offer up to 12.5 million shares of common stock. The company that jumped more than 200% year-to-date, reported a net loss of $80 million in the first quarter as reliance on coal decreased. And Transocean, which has bad credit and billions in debt, plans to sell up to $400 million in additional shares. The the share has increased by 78% this year.

Express and Peabody did not respond to Insider’s request for comment, and Transocean made no further comment on the article beyond the company’s filings with the Securities and Exchange Commission and its earnings call.