At-the-Market (ATM) Offerings
Forthcoming in the Journal of Financial and Quantitative Analysis
55 Pages Posted: 19 Nov 2012 Last revised: 21 Jan 2018
Date Written: January 2, 2018
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 that for 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.
Keywords: At-the-market offering; ATM; seasoned equity offering; equity issuance; certification
JEL Classification: G32, G34, G38
Suggested Citation: Suggested Citation
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