Download or read book The Operating Performance of Firms Conducting Seasoned Equity Offerings written by Tim Loughran and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent studies have documented that firms conducting seasoned equity offerings have inordinately low stock returns during the five years after the offering, following a sharp run-up in the year prior to the offering. This paper documents that the operating performance of issuing firms shows substantial improvement prior to the offering, but then deteriorates. The multiples at the time of the offering, however, do not reflect an expectation of deteriorating performance. Issuing firms are disproportionately high-growth firms, but issuers have much lower subsequent stock returns than nonissuers with the same growth rate.

Download or read book The Operating Performance of Firms Conducting Seasoned Equity Offerings in Bangladesh written by Mohammad Sadiqul Islam and published by . This book was released on 2014 with total page 13 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study attempts to examine the behavior and to identify the determinants of operating performance of SEOs in Bangladesh. It has been documented that firms making SEOs in Bangladesh tend to have improving operating performance prior to the equity offering and to have a declining operating performance after the equity offering. The decline in the operating performance of smaller firms during the post issue period is more severe than that of larger firms. Regression analysis indicates that the growth of assets faster than sales growth and the size of firm have significant influence on the operating performance of SEO firms. The major implications include the over-optimism of managers about the return on their investments and the existence of a possible earnings management by the SEO firms prior to equity offering.

Download or read book Seasoned Equity Offering and Operating Performance written by Naihan Bing and published by . This book was released on 2013 with total page 136 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Seasoned Equity Offerings Operating Performance and Overconfidence written by Panagiotis Andrikopoulos and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Prior research on seasoned equity offerings in UK shows that equity issuers report a significant long-term under performance in the period following the event. However, the factors contributing to such under performance are not yet fully explored. Using a sample of rights issues for the period 1988-1998, this study suggest that the long-term under performance is significantly related to a deterioration of companies' operating fundamentals in the post-offering period. Further comparison between quot;Bestquot; and quot;Worstquot; post-issue performers reveals that long-term under performance is predominantly robust in the case of fast growing firms with over-optimistic management. This evidence is consistent with the managerial overconfidence and quot;empire-buildingquot; hypotheses.

Download or read book The Performance of Irish Firms Conducting Seasoned Equity Offerings written by Colm Power and published by . This book was released on 2007 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Seasoned Capital Offerings written by Subba Reddy Yarram and published by . This book was released on 2004 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: The present study examines the behavior of seasoned offering firms surrounding their issue period for the capital issues offered during the period 1995-96 to 1998-99. Analysis of earnings management practices of firms though show apparent differences in terms of discretionary current accruals between issuers and non-issuers as well as between debt issuers and equity issuers, these differences are not statistically significant. This finding is consistent with Korean findings of Yoon and Miller (2002). Perhaps earnings management is all pervasive and is not just confined to seasoned offering firms in emerging markets unlike the markets in developed countries. Analysis of adjusted operating performance of firms show important differences for equity offering and debt offering seasoned firms. Similarly earnings management appears to have negative impact on the immediate post-issue operating performance while in the long-term it appears to have a positive impact for equity issuers. The latter result contradicts the findings of Rangan (1998) and Teoh et, al (1998). Analysis of influence of earnings management on stock market performance of seasoned offerings shows insignificant role of discretionary current accruals in explaining post-issue stock returns. Similarly analysis of determinants of SEO decision shows that run up in adjusted operating performance prior to offer has no impact - thus contradicting the view that seasoned offerings are timed to meet better operating performance - and that information asymmetry has positive influence on the decision to issue seasoned equity.

Download or read book Market Volatility written by Robert J. Shiller and published by MIT Press. This book was released on 1992-01-30 with total page 486 pages. Available in PDF, EPUB and Kindle. Book excerpt: Market Volatility proposes an innovative theory, backed by substantial statistical evidence, on the causes of price fluctuations in speculative markets. It challenges the standard efficient markets model for explaining asset prices by emphasizing the significant role that popular opinion or psychology can play in price volatility. Why does the stock market crash from time to time? Why does real estate go in and out of booms? Why do long term borrowing rates suddenly make surprising shifts? Market Volatility represents a culmination of Shiller's research on these questions over the last dozen years. It contains reprints of major papers with new interpretive material for those unfamiliar with the issues, new papers, new surveys of relevant literature, responses to critics, data sets, and reframing of basic conclusions. Included is work authored jointly with John Y. Campbell, Karl E. Case, Sanford J. Grossman, and Jeremy J. Siegel. Market Volatility sets out basic issues relevant to all markets in which prices make movements for speculative reasons and offers detailed analyses of the stock market, the bond market, and the real estate market. It pursues the relations of these speculative prices and extends the analysis of speculative markets to macroeconomic activity in general. In studies of the October 1987 stock market crash and boom and post-boom housing markets, Market Volatility reports on research directly aimed at collecting information about popular models and interpreting the consequences of belief in those models. Shiller asserts that popular models cause people to react incorrectly to economic data and believes that changing popular models themselves contribute significantly to price movements bearing no relation to fundamental shocks.

Download or read book Operating Performance of the Firms Issuing Equity Through Rights Offer written by Jijo Lukose and published by . This book was released on 2003 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper we analyze operating performance of BSE listed manufacturing firms following rights equity issue and its linkages with firm specific characteristics as hypothesized in the finance theory. Consistent with empirical results for seasoned equity offerings in the US market, there is statistically significant decline in the operating performance after the rights equity issue. This decline in performance is more severe for big firms, low market to book value firms and firms with lower directors' holdings. We found that the decline in performance is due to the inefficiency in utilization of assets and not due to decrease in profit margins. Further, various proxies measuring market valuation also declined during the post-issue period after a run up in the pre-issue period. Our results suggest that compared to asymmetric information hypothesis, over-investment hypothesis and agency models can better explain the decline in performance and rights equity issues are not simple de-leveraging decisions.

Download or read book Seasoned Equity Offerings by Small and Medium sized Enterprises written by Cécile Carpentier and published by . This book was released on 2010 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Post Offering Earnings Performance of Firms that Issue Seasoned Equity written by Hei Wai Lee and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study finds that growth firms experience significant unanticipated deterioration in their earnings performance following their seasoned equity offerings (SEO), but mature firms do not share the same negative experience. This finding is consistent with the findings of long run post offering stock price underperformance documented in the literature. However, it is inconsistent with the findings of a weak positive impact of growth opportunities on the stock price reaction to the SEO announcement. The negative role of growth opportunities also contradicts the predictions of signaling models that growth potential of the issuing firm has a positive impact on the information content of the SEO. Overall, the findings in this study are consistent with the general implication of the overvaluation hypothesis that managers issue equity securities when they know their firm is not as valuable as what the market believes.

Download or read book ACCOUNTING STOCK PERFORMANCE written by Liangyi Ouyang and published by Open Dissertation Press. This book was released on 2017-01-27 with total page 136 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation, "Accounting and Stock Performance of Initial Public Offerings and Seasoned Equity Offerings: Evidence in China" by Liangyi, Ouyang, 歐陽良宜, was obtained from The University of Hong Kong (Pokfulam, Hong Kong) and is being sold pursuant to Creative Commons: Attribution 3.0 Hong Kong License. The content of this dissertation has not been altered in any way. We have altered the formatting in order to facilitate the ease of printing and reading of the dissertation. All rights not granted by the above license are retained by the author. Abstract: Abstract of the thesis entitled Accounting and Stock Performance of Initial Public Offerings and Seasoned Equity Offerings: Evidence in China Submitted By OUYANG Liangyi For the Degree of Doctor of Philosophy at the University of Hong Kong in August 2004 Although it has a short history, the China stock market developed very fast in the past decade. Stock is now a primary investment instrument for Chinese. This research studies the long-term accounting and stock performance of initial public offerings and seasoned equity offerings in China. We find that operating performance of initial public offerings and seasoned equity offerings in China experience substantial deterioration in the post-issue period. Issuers typically have significant higher earnings and sales revenue than their industry peers before year 0. However, their advantages shrink to nothing in a short period. Extraordinarily high current accruals are reported in year 0, which consist of a large discretionary component after broken down by a Jones (1991) model. We attribute the unusual changes in accruals and operating performance to be a result of earnings management. Moreover, we find that both absolute and discretionary current accruals in year 0 are powerful in predicting changes of income and cash flow in the following three years. This finding further strengthens the hypothesis that managers dress up their earnings to meet the earnings threshold by recording aggressive accruals, which cause earnings reverse in the aftermarket period. Investors are surprised at the poor earnings. Earnings announcement effects, measured by 3-, 9- and 21-day market-adjusted abnormal returns are significantly negative in post-issue period. We also find stock offerings have negative buy-and-hold abnormal ii returns in a three-year window. Both IPOs and SEOs have around 30% less returns than size-matched non-issuers. However, when the matching standard changes to be size and book-to-market ratio, the abnormal returns are reduced by half and not significant for SEOs. We also apply the Fama and French (1993) model to monthly trading data of issuers. The result shows that the time-weighted abnormal return is not significant. We consider this difference to be a result of the time-clustering and cyclical pattern of stock issues in China. Due to high volumes of stock issues in periods of high past returns and low volumes in periods of low past returns, a time-weighted method may not find underperformance while an equal-weighted method may. We explain the negative cross-sectional abnormal returns as results of investor overoptimism and information asymmetry. Investors have insufficient information about issuers and overestimate issuers' future earnings. Along with new information released in earnings reports, they gradually downgrade their valuation, thus contributing to the negative cross-sectional returns. We find that the three-year buy-and-hold abnormal returns on issuers are significantly correlated with changes in net income during the same period, which is also supportive of the investor overoptimism hypothesis. This research contributes to the literature by providing new evidence from China, a major emerging economy with high growth. We suggest that earnings management could be stimulated by explicit earnings requirement and exacerbated by inve

Download or read book Three Essays on the Long run Performance of Firms Issuing Seasoned Equity Offerings written by Pawel Tomasz Bilinski and published by . This book was released on 2008 with total page 179 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Underwriting Services and the New Issues Market written by George J. Papaioannou and published by Academic Press. This book was released on 2017-07-27 with total page 334 pages. Available in PDF, EPUB and Kindle. Book excerpt: Underwriting Services and the New Issues Market integrates practice, theory and evidence from the global underwriting industry to present a comprehensive description and analysis of underwriting practices. After covering the regulation and mechanics of the underwriting process, it considers economic topics such as underwriting costs and compensation, the pricing of new issues, the stock price and operating performance of issuing firms, the evaluation of new issue decisions, and an analysis of the many choices issuers face in structuring new issues. Unlike other books, it systematically develops a critical perspective about underwriting practices, both in the U.S. and international markets, and with a level of detail unavailable elsewhere and an approach that reveals how financial institutions deliver underwriting services. Underwriting Services and the New Issues Market delivers an innovative and long overdue look at security issuance. Foreword by Frank Fabozzi Covers underwriting contracts and arrangements on pricing and costs Focuses on the financial consequences of the issuance decision for the firm Describes and evaluates decisions regarding the features and structure of new security offerings.

Download or read book The Long run Performance of Seasoned Equity Offerings with Rights written by Michel Dubois and published by . This book was released on 2000 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Long Term Performance of Seasoned Equity Offerings written by Narasimhan Jegadeesh and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: I investigate the long-term performance of firms that issue seasoned equity relative to a variety of benchmarks. I find that these firms significantly underperform all of my benchmarks over the five years following the equity issues. Across SEOs, I find similar levels of underperformance for both small firms and large firms, and both growth firms and value firms. The paper also shows that factor-model benchmarks are misspecified. Hence inferences on SEO underperformance based on such benchmarks are misleading. I also find that SEOs underperform their benchmarks by twice as much within earnings announcement windows as they do outside these windows.

Download or read book Investor Sentiment Market Timing and Seasoned Equity Offering written by Robin K. Chou and published by . This book was released on 2015 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the impact of investor sentiment on the probability of firms conducting seasoned equity offerings (SEOs) and on stock performance around and subsequent to SEOs. We first show that investor sentiment is positively related to SEO probability, and that small, high volatility, high R&D intensity, and non-dividend-paying firms are more likely to issue SEOs. The interaction effects between investor sentiment and firms' mispricing-related characteristics further suggest that the impact of investor sentiment on SEO probability is stronger for small and young firms. Moreover, we find that firms conducting SEOs during high sentiment periods experience less severe short-run price drops around the issuances, yet more severe post-issue long-run underperformance, compared to firms conducting SEOs during low sentiment periods. The effect of investor sentiment on stock performance is stronger for small, young, and high market-to-book ratio firms.

Download or read book Industry Screening written by Leroy D. Brooks and published by . This book was released on 2006 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: Investors may rely on industries to judge the quality of seasoned equity Offerings. In this paper, we propose an industry screening hypothesis where poorer industrial growth prospects deter lower-quality firms from issuing equity. We expect issuer quality to be negatively associated with industry growth opportunities. Our empirical evidence shows that low-growth industry issuers outperform those from high-growth industries in their announcement period cumulative abnormal returns and post-issue operating performance. These results are robust against alternative explanations. We interpret these findings as evidence for the existence of the industry screening eect.