Investor Sentiment and Seasoned Equity Offerings

Deng, Claire Xiaoying; Hrnjic, Emir; Ong, Seow Eng

doi:10.2139/ssrn.2087383

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Investor Sentiment and Seasoned Equity Offerings

56 Pages Posted: 19 Jun 2012

See all articles by Claire Xiaoying Deng

Claire Xiaoying Deng

University of Reading - Henley Business School,

Seow Eng Ong

National University of Singapore (NUS) - Department of Real Estate

There are 2 versions of this paper

Date Written: June 7, 2012

Abstract

We document that investor sentiment is positively related with pre-SEO overpricing and plays an important role in managers’ equity issuance decisions. Further, we provide evidence that investor sentiment impacts the SEO discounting and underpricing. High sentiment periods are followed by low long run returns suggesting that sentiment does not proxy for unobservable fundamentals. Overall, our findings are consistent with market timing and behavioral explanations for equity offerings.

Keywords: investor sentiment, seasoned equity offerings, market timing, behavioral finance, underwriters, real estate investment trust

JEL Classification: G14, G23, G24, G32

Suggested Citation: Suggested Citation

Deng, Xiaoying and Hrnjic, Emir and Ong, Seow Eng, Investor Sentiment and Seasoned Equity Offerings (June 7, 2012). Available at SSRN: https://ssrn.com/abstract=2087383 or http://dx.doi.org/10.2139/ssrn.2087383