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

See all articles by Matthew T. Billett

Matthew T. Billett

Indiana University - Kelley School of Business - Department of Finance

Ioannis V. Floros

University of Wisconsin - Milwaukee - Department of Finance

Jon A. Garfinkel

University of Iowa - Tippie College of Business

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

Billett, Matthew T. and Floros, Ioannis V. and Garfinkel, Jon A., At-the-Market (ATM) Offerings (January 2, 2018). Forthcoming in the Journal of Financial and Quantitative Analysis. Available at SSRN: https://ssrn.com/abstract=2178052 or http://dx.doi.org/10.2139/ssrn.2178052

Matthew T. Billett

Indiana University - Kelley School of Business - Department of Finance ( email )

1309 E. 10th St.
Bloomington, IN 47405
United States
812-855-3366 (Phone)

Ioannis V. Floros

University of Wisconsin - Milwaukee - Department of Finance ( email )

Milwaukee, WI 53201-0742
United States

Jon A. Garfinkel (Contact Author)

University of Iowa - Tippie College of Business ( email )

108 PBB
Iowa City, IA 52242-1000
United States
319-335-0943 (Phone)
319-335-3690 (Fax)

HOME PAGE: http://www.biz.uiowa.edu/faculty/jgarfinkel

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