The finance literature documents substantial negative stock price reaction to Seasoned Equity Offerings (SEO). Most studies on SEOs focus on the average negative reaction; however, about thirty to forty per cent of the firms actually experience positive abnormal returns at announcement. This paper tries to find firm specific factors that may explain the apparent heterogeneity in the stock price reaction to SEOs. We find that the firms with observed positive market reaction tend to have higher price run-up before the announcement, suggesting that investors may have higher expectations for the growth potential of the companies and hence the SEO may be viewed as an effort to raise the funds for the growth needs. We also find that these firms have high debt ratios, suggesting that the purpose of the SEO may be to reduce debt and optimize the capital structure, rather than taking advantage of the information asymmetry by issuing additional shares when the management believes the shares are overvalued.