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Keywords:

  • SEO;
  • IPO;
  • cycles;
  • information asymmetry;
  • investment opportunities;
  • investor sentiment;
  • market timing
  • G10;
  • G30

Abstract

Public equity offerings by seasoned firms (SEOs) exhibit similar but less volatile cycles than initial public offerings (IPOs) of newly public firms. Our paper provides a comprehensive examination of the factors that cause variation in the number of firms issuing SEOs. Specifically, we use four factors from studies of IPOs as potential determinants of SEO cycles. We find that whether tested separately or collectively, only the demand for capital and market timing hypotheses receive strong empirical support in explaining SEO volume. Investor sentiment is not an important factor in explaining SEO volume, nor is information asymmetry.