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Seasoned Equity Offerings: An Empirical Investigation

Ashok N Korwar
Affiliation Unknown

Ronald W. Masulis
Vanderbilt University - Owen Graduate School of Management; Vanderbilt University - School of Law

Journal of Financial Economics, Vol. 15, No. 1/2, pp. 91-118, 1986

Abstract:
This study examines common stock price adjustments to announcements of underwritten common stock offerings. On average, a negative stock price change is observed, which is larger for industrials than for public utilities. Combination primary-secondary stock offerings and dual stock-bond offerings exhibit similar negative announcement effects. Combination offerings involving decreases in management shareholdings exhibit significantly larger negative announcement effects. Cross sectional analysis of stock announcement returns indicates a positive relationship to firms' leverage changes, and a negative relationship to prior stock returns and (for industrials) to decreases in management shareholdings.

Keywords: SEOs, seasoned equity offerings, stock offers, announcement effects, primary offers, secondary offers

JEL Classifications: G14, G32

Accepted Paper Series

Date posted: February 06, 2007 ; Last revised: February 06, 2007

Suggested Citation

Korwar, Ashok N and Masulis, Ronald W., Seasoned Equity Offerings: An Empirical Investigation. Journal of Financial Economics, Vol. 15, No. 1/2, pp. 91-118, 1986. Available at SSRN: http://ssrn.com/abstract=961034

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Contact Information

Ronald W. Masulis (Contact Author) Vanderbilt University - Owen Graduate School of Management ( email ) 401 21st Avenue South Nashville, TN 37203 United States 615-322-3687 (Phone) 615-343-7177 (Fax)
Vanderbilt University - School of Law 131 21st Avenue South Nashville, TN 37203-1181 United States
Ashok N Korwar Affiliation Unknown No Address Available