ABSTRACT
The aim of this study is to determine whether the Signaling Theory or the Market Feed-back Theory has more explaining power regarding the relationship between Initial Public Offering (IPO) and First Seasoned Equity Offering (FiSEO) in the Indonesian capital market. The findings of this study show that asymmetric information exists in the Indonesian capital market related to IPO and FiSEO. The Signaling Theory can explain the speed of FiSEO in the Indonesian capital market. Nevertheless, the Market Feedback Theory has more explaining power than the Signaling Theory in relation to the offering value of the FiSEO. Another finding of this study indicates the influence of the corporate lifecycle on the speed of FiSEO. Further research can be directed to answer the question as to whether FiSEO in Indonesia is pre-planned decisions in timing the market (Baker & Wurgler, 2002) or the impact of the dynamics of the corporate lifecycle (DeAngelo et al., 2010; Hovakimian & Hutton, 2010).
