The concurrent offerings puzzle


This chapter aims to explain the use and valuation impact of an interesting and innovative transaction structure: in concurrent offerings, firms issue seasoned equity and convertible securities in combination. Concurrent offerings have neither theoretically nor empirically been examined before. However, a comparable structure exists when firms go public: in unit initial public offerings (IPOs), firms sell bundles of stocks and warrants. Chemmanur/ Fulghieri (1997) present a signaling-model for the use of unit IPOs, which receives empirical support from investigations by How/Howe (2001), Lee/Lee/Taylor (2003) and l3youn/Moore (2003).192 This model can be adapted for concurrent offerings and is used as a basis for the discussion.


Abnormal Return Financial Distress Free Cash Flow Common Stock Cumulative Abnormal Return 
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© Deutscher Universitäts-Verlag|GWV Fachverlage GmbH, Wiesbaden 2006

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