Long-run underperformance of seasoned equity offerings: Fact or an illusion?

Do Seasoned Equity Offerings Really Underperform in the Long Run? Evidence from New Zealand

This study investigates the long run performance of seasoned equity offerings on the New Zealand Stock Exchange. The sample consists of 39 seasoned equity offerings between 1984 and 1994. The research investigates the relationships between the long run performance and issue size, issuer size, the proportion of issue size to firm size, and survivorship. The results of the research indicate that ...

Is there Abnormal Return after Seasoned Equity Offerings?

Previous studies have documented that firms participating in Seasoned Equity Offerings (SEO) show substantial long-run stock underperformance. This finding poses one of the strongest challenges to the Efficient Market Hypothesis (EMH). However, other studies argue that these empirical studies are plagued by the inability of the matching techniques to properly control for all risk factors, and t...

Initial public offerings , subsequent seasoned equity offerings , and long - run performance : Evidence from IPOs in Germany

Propensity Score Matching: An Application in Empirical Finance

Because of the difficulty in multi-dimensional matching and missing variables, investigation of long-run stock performance after major corporate events has been plagued by the “bad model problem”. This study contributes to the literature by implementing the propensity score estimator which is able to match firms in multiple dimensions simultaneously, and illustrate this methodology in the conte...

The Impact of Cost of Equity on Seasoned Equity Offerings

This paper provides an empirical link between the expected cost of equity and firms’ Seasoned Equity Offerings activities, using a novel measure of forward-looking cost of equity. There is a negative impact of expected cost equity on SEO likelihood and amount of proceeds, exists on both market and firm level. Empirical evidence suggests that the negative SEO announcement effect and post-SEO lon...