The Revival of Shelf-Registered Corporate Equity Offerings

41 Pages Posted: 10 Dec 2004 Last revised: 15 Jul 2008

See all articles by Don M. Autore

Don M. Autore

Florida State University - College of Business

Raman Kumar

Virginia Polytechnic Institute & State University - Pamplin College of Business

Dilip K. Shome

Virginia Polytechnic Institute & State University - Pamplin College of Business

Multiple version iconThere are 2 versions of this paper

Date Written: December 1, 2007

Abstract

We report that traditional seasoned equity offerings (SEOs) are no longer firms' preferred choice for raising seasoned public equity. Traditional offerings have recently been surpassed by shelf-registered offerings in terms of both annual frequency and total capital raised. This represents a dramatic shift from the 1980s, during which the overwhelming majority of firms favored traditional over shelf-registered offerings. We find that the growth in shelf use is related to firms increasingly valuing and using the option feature of shelf registration to defer offerings. Moreover, the evidence indicates that the way firms now use shelf offerings resolves the shelf under-certification problem and results in no larger market penalties and significantly lower underwriter fees relative to non-shelf offerings. Finally, firms often use universal shelf filings and choose between debt and equity offerings based on the prevailing relative market conditions.

Keywords: Shelf registration, seasoned equity offerings, underwriter certification

JEL Classification: G30, G32

Suggested Citation

Autore, Don M. and Kumar, Raman and Shome, Dilip K., The Revival of Shelf-Registered Corporate Equity Offerings (December 1, 2007). Available at SSRN: https://ssrn.com/abstract=629445 or http://dx.doi.org/10.2139/ssrn.629445

Don M. Autore (Contact Author)

Florida State University - College of Business ( email )

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Raman Kumar

Virginia Polytechnic Institute & State University - Pamplin College of Business ( email )

Dept. of Finance, Pamplin 2126
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United States
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540-231-3155 (Fax)

Dilip K. Shome

Virginia Polytechnic Institute & State University - Pamplin College of Business ( email )

1016 Pamplin Hall
Blacksburg, VA 24061
United States
540-231-3607 (Phone)
540-231-3155 (Fax)

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