Smaller Companies Flood the Market With Share Sales Off Trump Bump

Good times for companies with a market value of less than $5 billion.

A Kratos MQM-178 Firejet drone.
Photographer: In Pictures Ltd./Corbis via Getty Images

Provide news feedback or report an error

Confidential tip?

Send a tip to our reporters

Site feedback:

Take our Survey

By Drew Singer

April 27, 2017 at 2:00 PM UTC

This article is for subscribers only.

This article is part of the May 1, 2017 issue of businessweek.

Nine days after Donald Trump was elected president, shares of Kratos Defense & Security Solutions Inc. had soared 22 percent. The gain was no mystery: Kratos is a defense contractor that among other things provides surveillance systems for the government. That’s a useful business to be in while the president-elect is promising a big-league boost in military spending.

Management at Kratos acted while the stock was hot. On Nov. 18, for the first time in more than four years, the San Diego company issued new shares and sold them to investors, raising $80.5 million in cash, before fees. Sale proceeds funded investments in unmanned aerial vehicles. Kratos expects its drone business to double over the next two years.