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At-the-Market Offerings

Author

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  • Billett, Matthew T.
  • Floros, Ioannis V.
  • Garfinkel, Jon A.

Abstract

We study at-the-market (ATM) equity offerings, which are direct share issuances sold in the secondary market that forgo underwriters and “dribble-out” shares over time rather than raising them all at once. Enabled in 2008, their use has increased dramatically, and in 2016, their incidence and total proceeds were, respectively, 63% and 26% of those for seasoned equity offerings (SEOs). Determinants of firms’ choice between ATMs and SEOs are consistent with the costly certification hypothesis of Chemmanur and Fulghieri (1994). We also find that 65% of ATM proceeds are used to stockpile cash compared to 84% of SEO proceeds.

Suggested Citation

  • Billett, Matthew T. & Floros, Ioannis V. & Garfinkel, Jon A., 2019. "At-the-Market Offerings," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 54(3), pages 1263-1283, June.
    • Handle: RePEc:cup:jfinqa:v:54:y:2019:i:03:p:1263-1283_00
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    Cited by:

    1. Autore, Don M. & Jones, Timothy & Kovacs, Tunde & Peterson, David R., 2021. "Confidential marketing in seasoned equity offers," Journal of Corporate Finance, Elsevier, vol. 68(C).
    2. Mike Burkart & Hongda Zhong, 2023. "Equity Issuance Methods and Dilution," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 12(1), pages 78-130.
    3. Daniel Broxterman & Tingyu Zhou, 2023. "Information Frictions in Real Estate Markets: Recent Evidence and Issues," The Journal of Real Estate Finance and Economics, Springer, vol. 66(2), pages 203-298, February.

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