The Gang that Could Shoot Straight – Follow-on Award

The sale of a follow-on offering of shares may be either easy or difficult. The follow-on lacks the hype and hoped for jump of an IPO. It’s historic performance, good or bad, has already been established. The analysts have dissected and modeled the company from which they have derived a target price. The facts are there for all to see.

Perhaps more importantly, purchasers know that they are buying at the bottom of the capital structure and the likelihood is that they are paying a higher price than the existing shareholders. And, once issued, the shares tend to drop in price as a consequence of dilution. The follow-on may also include a secondary offering with existing shareholders cashing out, which may give one even further pause. Returns whether dividends or

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