Capital structure strategies of Russian IT companies

capital structure formation is still a relevant topic both for the scientific community and for the top management of companies making decisions about its change. This article analyzes the main theories of capital structure, which describe most companies’ behavior in terms of capital structure formation. First of all, the article by Franco Modigliani and Merton Miller was considered, which laid the foundation for capital structure studies. The static trade-off theory and the pecking order theory were also considered. In addition, the theory of agency costs and the theory of market timing were presented as well. Objective: to explain the actions of Russian IT companies to attract additional capital within the framework of one of the presented theories of capital structure and define their current strategy. Methods: the study used the method of analyzing the financial performance of companies and scientific literature. Results: an analysis of the financial performance of Russian IT companies (VK, Yandex) was conducted. First of all, the change in the debt-to-equity ratio of each company was analyzed. The analysis used the companies' performance for 2023 and 2024. The recent capital raising activities of the companies and their goals were analyzed as well. Conclusion: as a result of the analysis, it was revealed that VK's debt-to-equity ratio has significantly increased, and the recent additional share issuance is aimed at optimizing the company's capital structure by the top management. VK's behavior can be explained by the static trade-off theory. In Yandex’s case, the top management claims that there is no need to optimize the capital structure. However, Yandex has announced the issuance of bonds to raise funds. In this scenario, the company's behavior is better explained by the pecking order theory.

capital structure, Russian IT companies, internal financing, external financing