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Within the past year, the stock price of Alcoa (NYSE: AA), a mega aluminum producer, has gone from a high of $44.78 to a low of $4.97. Although, during the past few weeks, things have perked up. In fact, yesterday Alcoa's stock price surged 17% to $6.40.
The reason? Alcoa was able to drum up interest in its recent financing. In all, the company raised $1.3 billion in stock and convertible notes. Keep in mind that Alcoa expected to raise $1.1 billion.
In the aftermarket, the trading of the new securities was robust -- which certainly delighted traders.
To deal with the plunge in aluminum prices (down about 50% or so), Alcoa has taken swift action. For example, the company slashed its dividend and has cut back on expenses.
Interestingly enough, there are some signs of possible inflation. After all, the Fed is printing lots and lots of money right now. So, ultimately this could be a nice boost to commodities operators like Alcoa.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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