Abstract

http://ssrn.com/abstract=1372177
 
 

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Seasoned Equity Offerings, Operating Performance and Overconfidence: Evidence from the UK


Panagiotis Andrikopoulos


De Montfort University - Department of Accounting and Finance


Journal of Economics and Business, Vol. 61, No. 3, pp. 189-215, 2009

Abstract:     
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 "Best" and "Worst" 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 "empire-building" hypotheses.

Keywords: Rights issues, Seasoned equity offerings, Long-term performance, Operating performance, Managerial overconfidence

JEL Classification: G14, G32

Accepted Paper Series


Not Available For Download

Date posted: April 2, 2009  

Suggested Citation

Andrikopoulos, Panagiotis, Seasoned Equity Offerings, Operating Performance and Overconfidence: Evidence from the UK. Journal of Economics and Business, Vol. 61, No. 3, pp. 189-215, 2009. Available at SSRN: http://ssrn.com/abstract=1372177

Contact Information

Panagiotis Andrikopoulos (Contact Author)
De Montfort University - Department of Accounting and Finance ( email )
The Gateway
LE1 9BH
Leicester
United Kingdom
+44(0)116 250 6331 (Phone)
+44(0)116 251 7548 (Fax)
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