Seasoned Equity Offerings and Differences in Share-Price Impact by Firm Categories

The seasoned equity offering (SEO) market plays a significant role in the economic development of a country by providing liquidity for ongoing commercialization and innovation. This study is a comprehensive analysis of 149 SEOs and their effect on share prices in Thailand between 2009 and 2019. SEOs are categorized based on their time categories (early, mid, and grown) and volume categories (small, medium, big, and super). Using the event study methodology (multi-factor model), we find that most SEOs under both categories have a negative cumulative abnormal return (CAR) in the window period. Ranking the types of SEOs reveals that grown SEOs have the highest proportion of negative CAR under the time categories. Under the volume categories, medium SEOs show the largest share. The results were validated by regression assumption tests provided by Gnu Regression, Econometrics and Time-series Library, and correspond to established theories. The paper also contains an extensive literature review of studies examining the link between SEOs and share-price development. Our findings have important implications for corporations, investors, and regulatory bodies and can thus help in increasing market confidence for sustainable corporate funding.

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Impact of Corporate Social Responsibility Awards on Share Prices

Journal of Accounting and Finance in Emerging Economies ◽

10.26710/jafee.v5i1.682 ◽

2019 ◽

Vol 5 (1) ◽

pp. 141-154

Author(s):

Zeeshan Mahmood ◽

Javed Iqbal ◽

Waris Ali ◽

Muhammad Aamir

Keyword(s):

Corporate Social Responsibility ◽

Social Responsibility ◽

Stock Exchange ◽

Business Case ◽

Share Price ◽

Event Window ◽

Share Prices ◽

Study Methodology ◽

Corporate Social ◽

The Impact

This paper provides empirical evidence to evaluate the business case of corporate social responsibility. In contrast to former studies, we choose to examine the relationship between corporate social responsibility awards and share prices. We examined this relationship in the contextual setting of Pakistan, where several award schemes are operating to reward CSR performance. An event study methodology was adopted to investigate the impact of award announcement on the abnormal return of TOP 100 companies listed on the Pakistan Stock Exchange. A daily price for each company was collected during the estimation window of 120 days before the event window and an event window of 3 days [-1, 0, 1]. Our analysis shows that the overall announcement of CSR awards has an insignificant impact on share price.

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Agency Theory and Flotation Methods in Seasoned Equity Offerings: The Case in Taiwan

Review of Pacific Basin Financial Markets and Policies ◽

10.1142/s0219091508001477 ◽

2008 ◽

Vol 11 (04) ◽

pp. 555-567 ◽

Cited By ~ 6

Author(s):

Kehluh Wang ◽

Yi-Hsuan Chen ◽

Szu-Wei Huang

Keyword(s):

Agency Theory ◽

Stock Exchange ◽

Abnormal Returns ◽

Seasoned Equity Offerings ◽

Agency Cost ◽

Share Price ◽

Equity Offerings ◽

Cross Sectional ◽

Taiwan Stock Exchange ◽

Negative Results

The purpose of this study is to examine the impacts of alternative flotation methods on price performance of seasoned equity offerings, and to compare the competing hypotheses supported by asymmetric information theory and agency theory. Based on 385 sample issues which were listed in Taiwan Stock Exchange from 1996 to 2006, we find that the bookbuilding flotation method demonstrates significant positive abnormal returns for issuing firms, whereas the fixed-price method exhibits negative results. The empirical findings support the agency theory in the sense that the bookbuilding procedure offers a mechanism to strengthen the external monitoring provided by blockholders, which can subsequently reduce the agency cost and thus increase the share price. Further cross sectional analysis confirms this argument. The result of the study implies that the governments should take effective actions to help regulate agency problems in emerging markets such as Taiwan.

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Long-Run Performance Of U.S. Seasoned Equity Offerings After The Year 1995

Journal of Applied Business Research (JABR) ◽

10.19030/jabr.v30i5.8787 ◽

2014 ◽

Vol 30 (5) ◽

pp. 1305

Author(s):

Chanyoung Eom

Keyword(s):

Strong Evidence ◽

Risk Adjustment ◽

Factor Model ◽

Seasoned Equity Offerings ◽

Font Size ◽

Equity Offerings ◽

Domestic Firms ◽

Long Run ◽

Current Assessment ◽

Three Factor

<span style="font-family: "Times New Roman","serif"; font-size: 10pt; mso-fareast-font-family: "Times New Roman"; mso-ansi-language: EN-US; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;">This paper questions if the anomaly in the events of seasoned equity offerings has remained significant after it was first documented and analyzed in the year 1995. I find that U.S. domestic firms issuing primary and combined SEOs underperform in the three years after issuance between 1970 and 1994, while the same underperformance is not documented thereafter. This would suggest that the current assessment of the SEO anomaly could be biasedly influenced by early SEO events conducted before the year 1995. Moreover, this paper provides strong evidence that the anomaly is closely related to the incorrect risk adjustment of the Fama-French three-factor model. </span><div style="left: -10000px; top: 0px; width: 1px; height: 1px; overflow: hidden; position: absolute;" id="_mcePaste" class="mcePaste"></div>

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