The stock market has been on an impressive run over the past week and a half, regaining a huge portion of its losses since November 2021. Little has changed either across the financial markets or in current events to warrant the shift in sentiment, but getting any more clarity on issues often tends to lead investors to see their initial responses to stressful situations were overreactions. After having gained as much as 12% in just the past six days, though, major market benchmarks looked poised to take a pause in the rally on Wednesday morning. As of 8:30 a.m. ET, futures on the Dow Jones Industrial Average (^DJI 0.40%) were down 128 points to 34,581, while S&P 500 (^GSPC 1.02%) futures had fallen 22 points to 4,483 and Nasdaq Composite (^IXIC 2.02%) futures had given back 115 points to 14,539.
Some companies have taken steps to take advantage of the boost in share prices recently, and one that felt the sting of that decision Wednesday morning was Piedmont Lithium (PLL 6.57%). Elsewhere, earnings reports continued to trickle in, and recreational vehicle specialist Winnebago Industries (WGO 0.90%) wasn't quite able to give investors everything they had wanted to see despite a solid performance for its underlying business. Read on to learn more about both companies.
Piedmont sells high
Shares of North Carolina-based Piedmont Lithium have risen close to their all-time highs in recent days. However, they were down more than 9% in premarket trading on Wednesday morning following news that the company had taken the opportunity to raise capital through a secondary stock offering.
Piedmont had announced its plans to do the offering a couple of days ago, but the final pricing for the newly issued shares came out late Tuesday after the end of the market's regular trading session. Piedmont boosted the size of its offering to 1.75 million, but it was only able to raise $65 per share for the stock. That was a big discount from the $75.17 per share closing price from Tuesday, and the premarket decline adjusted to reflect some of the reduced intrinsic value from the dilutive impacts of the offering.
Despite the immediate impact, Piedmont's intentions for using its capital are reasonable. It wants to restart operations at a site located in Quebec, and the proceeds will go toward covering Piedmont's share of the funding necessary to do so. It also wants to do exploration in western Ghana with partner Atlantic Lithium, in which Piedmont holds a minority interest, as well as invest domestically in its merchant lithium hydroxide plant and in its core Carolina Lithium project.
With the appetite for electric vehicles fueling lithium demand and the spike in commodities prices stemming from sanctions against Russia, natural resources companies like Piedmont are getting a lot of attention. It's entirely possible that today's drop will be just a momentary blip in an ongoing uptrend for the lithium stock.
Image source: Getty Images.
Winnebago keeps rolling down the highway
Elsewhere, shares of Winnebago were down just over 1% in premarket trading. The recreational vehicle (RV) manufacturing giant reported fiscal second-quarter financial results that showed significant strength for the industry despite facing pressures, even if they didn't quite satisfy investor expectations.
Winnebago's latest numbers kept up its impressive forward momentum. Quarterly revenue of $1.16 billion was up 39% year over year, with 29% organic growth supplemented by the company's recent acquisition of pontoon boat specialist Barletta. Winnebago's bottom line also got a nice boost, jumping 42% to $3.14 per share.
CEO Michael Happe commented on continued strong consumer demand for its outdoor lifestyle brands, including record sales for both RV and marine products. Winnebago has gained market share among RV manufacturers, hitting 14.3%, and it has quickly become one of the top five pontoon boat brands in the business.
Key to Winnebago's success has been its ability to take pricing action to offset inflation in materials and components. That has kept the company's margins high, and it will be an essential component going forward for shareholders who want to see Winnebago's stock return to its 2021 highs.