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Timing Differences between SEO Methods

Author

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  • Svein olav Krakstad

    (University of Stavanger)

Abstract

This paper investigates characteristics of Norwegian seasoned equity issuing companies. Literature about the timing issue has mainly been focusing on U.S. firm commitments, but we include rights issues and divide firm commitments into three subgroups, accelerated bookbuilt offerings, bought deals and fully marketed offerings. The main difference between the subgroups of firm commitments is that firms using accelerated bookbuilt offerings and bought deals have lower debt to assets ratio than firms using fully marketed offerings when issuing seasoned equity. Rights offer is usually not as well timed as firm commitments. The average book to market and debt to assets ratios are lower for companies that issue seasoned equity with firm commitments than for rights issuing firms.

Suggested Citation

  • Svein olav Krakstad, 2013. "Timing Differences between SEO Methods," Economics Bulletin, AccessEcon, vol. 33(4), pages 3070-3079.
    • Handle: RePEc:ebl:ecbull:eb-13-00741
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2013/Volume33/EB-13-V33-I4-P286.pdf
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    References listed on IDEAS

    as
    1. Lemmon, Michael L. & Zender, Jaime F., 2010. "Debt Capacity and Tests of Capital Structure Theories," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 45(5), pages 1161-1187, October.
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    3. Cronqvist, Henrik & Nilsson, Mattias, 2005. "The choice between rights offerings and private equity placements," Journal of Financial Economics, Elsevier, vol. 78(2), pages 375-407, November.
    4. Timothy R. Burch & William G. Christie & Vikram Nanda, 2004. "Do Firms Time Equity Offerings? Evidence from the 1930s and 1940s," Financial Management, Financial Management Association, vol. 33(1), Spring.
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    6. DeAngelo, Harry & DeAngelo, Linda & Stulz, René M., 2010. "Seasoned equity offerings, market timing, and the corporate lifecycle," Journal of Financial Economics, Elsevier, vol. 95(3), pages 275-295, March.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    SEO; timing; firm commitments; rights issues; book to market; debt to asset;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance

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