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Seasoned Equity Offering (SEO)

A seasoned equity offering (SEO) refers to the issuance of additional shares by a company that has already gone public. Unlike an initial public offering (IPO), which marks the company's first sale of stock to the public, an SEO occurs when a public company raises more capital by selling new shares. SEOs are often used to fund expansion, pay down debt, or raise capital for other corporate purposes. While SEOs can dilute existing shareholders' ownership, they provide companies with a way to access additional financing.

Example

A tech company that went public five years ago issues an SEO to raise $100 million in capital to fund its expansion into international markets.

Key points

• The issuance of additional shares by a company that is already public.

• Used to raise capital for expansion, debt repayment, or other corporate purposes.

• Can dilute existing shareholders' ownership but provides access to new financing.

Quick Answers to Curious Questions

To raise capital for expansion, pay down debt, or fund other corporate activities, allowing companies to access new financing.

SEOs can dilute existing shareholders' ownership by increasing the number of shares outstanding, potentially lowering their percentage stake.

An IPO is the company's initial sale of shares to the public, while an SEO is the issuance of additional shares after the company has already gone public.