What primary factor is considered in a marketed follow-on offering before pricing?

In a marketed follow-on offering, the primary factor considered before pricing is investor interest. This is crucial because the success of the follow-on offering largely depends on how receptive existing and potential investors are to purchasing additional shares of the company. Understanding investor interest helps determine the optimal pricing point for the offering, ensuring that it is attractive enough to generate demand while also meeting the company’s capital-raising goals.

When assessing investor interest, the underwriters or investment bankers conducting the offering will engage in discussions with potential investors to gauge their willingness to invest at certain price levels. High investor interest typically facilitates a successful offering and can even lead to an oversubscription, where demand exceeds supply, allowing the company to potentially price shares at a higher level.

Market stability, company history, and risk assessment are important considerations in the broader context of an equity offering, but when it comes specifically to pricing a marketed follow-on offering, understanding investor interest is the most direct influence on setting the final price. This ensures that the offering aligns with current market sentiments and investor expectations.