SEASONED COMMON-STOCK ISSUANCE FOLLOWING AN IPO

We examine valuation effects of a NASDAQ firm's first seasoned common stock issue after its initial public offering on NASDAQ and analyze ho w share-price response is affected by characteristics of the firm and its IPO. First seasoned issues have excess returns of -2.9%, occur aft er periods of sharply rising stock market prices, and have large posit ive cumulative excess returns prior to announcement. We find IPO under pricing mitigates share-price response to seasoned offerings as predic ted by Welch's (1989) model of the IPO market. Returns are also invers ely related to the proportion of firm shares sold by insiders as part of the seasoned offering.