Secondary Offering Simulation

The Secondary Offering Simulation immerses participants in the process of managing a secondary equity offering, providing hands-on experience in complex capital markets activities beyond an initial public offering.

Secondary Offering Simulation Overview

This simulation guides participants through the strategic and operational challenges of planning, structuring, pricing, and executing a secondary stock offering. Participants work in roles such as investment bankers, company executives, and equity investors, navigating market conditions, investor demand, regulatory constraints, and pricing strategies.

Through realistic scenarios, the simulation emphasizes teamwork, decision-making under uncertainty, and communication with stakeholders.

Although ideal for undergraduate and graduate finance courses, executive training, and corporate finance skill workshops, the simulation is modular and scalable, allowing instructors to vary complexity.

Secondary Offering Simulation Concepts

Participants work through realistic scenarios, which can be customized to emphasize or exclude specific topics depending on the learning goals. This modular structure allows the simulation to be tailored to any type of session. Key concepts include:

Secondary equity offerings and market impact
Role of underwriters and syndicates
Pricing strategies for secondary offerings
Investor demand assessment and bookbuilding
Regulatory compliance and disclosure requirements
Equity dilution and shareholder value considerations
Timing market conditions and competitive positioning
Communication strategies with investors and media

Gameflow

What Participants Do

In the simulation, participants will:

Analyze client business fundamentals and market environment
Develop secondary offering structure and size
Collaborate on pricing and allocation strategies
Manage investor relations and bookbuilding exercises
React to market feedback and adjust offering approach
Prepare and deliver investor pitches and public communications
Coordinate with regulatory and compliance teams
Debrief and reflect on offering outcomes and learning points

Learning Objectives

By the end of the simulation, participants will be able to:

Understand the mechanics and roles in secondary equity offerings
Apply strategic decision-making to optimize offering size and pricing
Evaluate market sentiment and investor appetite effectively
Navigate regulatory frameworks impacting secondary offerings
Manage the trade-off between raising capital and shareholder dilution
Communicate complex financial information to diverse stakeholders
React adaptively to dynamic market conditions and investor feedback
Build confidence in real-world capital markets transactions

How the Secondary Offering Simulation Works

This simulation can be run individually or in teams in academic or corporate contexts. Each cycle represents a stage of getting through a pressing financial situation.

1. Setup and briefing Participants are assigned roles (issuer, underwriting banks, legal/compliance, investor relations) and receive a market scenario, corporate context, and objectives for the secondary offering. Data includes current stock volatility, trading liquidity, and relevant regulatory considerations.

2. Analysis and planning Teams review baseline financials, existing capital structure, and market conditions. They determine offering type, size, pricing range, and timing. They simulate various scenarios including price volatility, demand shifts, and potential over-allotment options.

3. Structuring the deal Choosing Offering type (secondary offering vs. additional primary issuance), with or without greenshoe. Sizing as a percent of outstanding shares and the impact on dilution. Underwriting syndicate composition, fee structure, and allocation policy.

4. Investor engagement and pricing Roadshows or virtual presentations are conducted; investor feedback is translated into a final pricing decision. Roadshow materials, press releases, and Q&A scripts are prepared to address common investor inquiries.

5. Execution and risk controls Final pricing, book-building outcomes, and allocation decisions are executed. Potential risk events (underpricing, volatility spikes, unfavorable demand) trigger contingency plans and alternate timelines.

6. Post-deal review Immediate post-deal performance analysis compares expected versus actual proceeds, dilution, and market reaction. Team debriefs identify learnings for future transactions and update the learning objectives accordingly.

Frequently Asked Questions

What is a secondary offering simulation? A training tool that simulates the process of conducting a secondary equity offering to teach strategic, financial, and operational skills.
Who should participate in a secondary offering simulation? Business students, finance professionals, investment bankers, and corporate strategists looking to deepen equity capital markets knowledge.
How long does the simulation take? Typically between 2 to 4 hours, adjustable based on program needs.
Can the simulation be customized? Yes, modules can be tailored for specific markets, industries, or learning objectives.
** Is prior finance experience required?** No, the simulation includes instructional support for all experience levels.

Assessment

Assessment of participant performance can be tailored according to the host institution’s objectives (business school, corporate training, assessment centre). Typical assessment criteria include:

Timeliness and accuracy in preparing and communicating a secondary offering plan, including regulatory disclosures, prospectus updates, and pricing mechanics.
Choice of offering type (primary vs. secondary, with/without over-allotment options), allocation strategy, and alignment with issuer objectives
Adherence to securities laws, disclosure requirements, and exchange rules; handling of risk factors, legal opinions, and underwriting agreements
Assessment of market windows, investor demand signals, pricing discipline, and execution risk under volatility; use of roadshows and investor meetings