An Analysis of Seasoned Equity Offerings by Equity Reits (1991-95)

Posted: 19 Oct 1999

See all articles by Chinmoy Ghosh

Chinmoy Ghosh

University of Connecticut - Department of Finance

Raja Nag

Monmouth University - Department of Economics, Finance, and Real Estate

C. F. Sirmans

Florida State University - Department of Risk Management, Insurance, Real Estate & Business Law

Abstract

This paper examines the valuation effect around the filing and offer dates of seasoned equity offerings by Equity REITs over the period 1991-1995. Based on a much larger sample, our finding of a significantly negative reaction to filing announcements corroborates the evidence in Howe and shilling (1988). our analyses indicate that the valuation effect is impacted more by the information content of the filing than any tax-based explanations. We find a significantly negative valuation effect on the offer day as well. The effect persists even after adjustment of returns by the bid-ask bounce induced by excessive selling of shares in the secondary market by institutional investors to take advantage of offer price discounts. While we attribute the result partly to order flow imbalance around the offer day, this finding is inconsistent with extant literature and merits further investigation.

JEL Classification: G12

Suggested Citation

Ghosh, Chinmoy and Nag, Raja and Sirmans, C. F., An Analysis of Seasoned Equity Offerings by Equity Reits (1991-95). Available at SSRN: https://ssrn.com/abstract=181489

Chinmoy Ghosh (Contact Author)

University of Connecticut - Department of Finance ( email )

School of Business
2100 Hillside Road
Storrs, CT 06269
United States
860-486-3040 (Phone)
860-486-0349 (Fax)

Raja Nag

Monmouth University - Department of Economics, Finance, and Real Estate ( email )

West Long Branch, NJ 07764
United States
732-263-5344 (Phone)
732-263-5128 (Fax)

C. F. Sirmans

Florida State University - Department of Risk Management, Insurance, Real Estate & Business Law ( email )

Tallahasse, FL 32306
United States
850 644-4076 (Phone)

HOME PAGE: http://www.cob.fsu.edu/rmi

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