The marketing of seasoned equity offerings

• 成果类型: Article
• 署名作者: Gao, Xiaohui; Ritter, Jay R.
• 署名单位: University of Hong Kong; State University System of Florida; University of Florida
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2010.03.007
• 发表日期: 2010
• 页码: 33-52
• 关键词: Marketing of securities; Follow-on offerings; Seasoned equity offerings; Bookbuilding

摘要

In an accelerated seasoned equity offering (SEO), an issuer foregoes the investment bank's marketing efforts in return for a lower fee. To explain why many issuing firms choose a higher cost fully marketed offer, we posit that the marketing effort flattens the issuer's short-run demand curve. Alternatively stated, with a fully marketed offer, the issuer is paying investment bankers to create demand, making the elasticity of demand at the time of issuance an endogenous choice variable. Empirical analysis shows that both the pre-issue elasticity of the issuing firm's demand curve and the offer size are important determinants of the offer method choice. We find evidence of a large transitory increase in the elasticity of demand for issuers conducting fully marketed SEOs. (c) 2010 Elsevier B.V. All rights reserved.