40 Pages Posted: 18 Mar 2006 Last revised: 12 May 2014
Date Written: April 29, 2010
Prior studies conclude that firms’ equity underperforms following many individual sorts of external financing. These conclusions naturally raise significant questions about market efficiency and/or about the techniques used to measure long run “abnormal returns.” Rather than concentrating on a single security type or issuance, we examine long-run performance following any and all sorts of security issuances. Initial financing events do not associate with underperformance; however subsequent financings do. Our results suggest that negative post-issuance returns have nothing to do with the specific type of security issued, and everything to do with the number of types of securities issued.
Keywords: External Finance, Security Issuance, Long-run Performance
JEL Classification: G30
Suggested Citation: Suggested Citation
Billett, Matthew T. and Flannery , Mark J. and Garfinkel, Jon A., Frequent Issuers' Influence on Long-Run Post-Issuance Returns (April 29, 2010). Journal of Financial Economics (JFE), Forthcoming. Available at SSRN: https://ssrn.com/abstract=891484 or http://dx.doi.org/10.2139/ssrn.891484
By Lu Zhang