Journal ArticleDOI
Long-Run Performance and Insider Trading in Completed and Canceled Seasoned Equity Offerings
TLDR
In this article, the authors examined long-run performance and insider trading around canceled and completed seasoned equity offerings (SEOs) and found that insider selling increases prior to competed and canceled SEOs, but declines afferward only for canceled offerings.Abstract:
This paper provides evidence on managerial motives for raising equity by examining long-run performance and insider trading around canceled and completed seasoned equity offerings (SEOs). Insider selling increases prior to competed and canceled SEOs, but declines afferward only for canceled offerings. For completed SEOs, pre-filing insider trading is related to long-run performance after completion. For Canceled sEOs, pre-filing insider trading is related to stock performance between filing and cancellation. Finally, changes in dence is consistent with insiders exploiting windows of opportunity by attempting to issue overvalued equity and by canceling the issue when the market reaction to the announcement eliminates the overvaluation.read more
Citations
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Book ChapterDOI
Investment Banking and Securities Issuance
TL;DR: In this paper, the authors analyze the securities issuance process, focusing on initial public offerings (IPOs) and seasoned equity offerings (SEOs), and find that short run underpricing, long run underperformance, and extreme time-series fluctuations in volume and underprices are common.
ReportDOI
Decoding Inside Information
TL;DR: In this paper, the authors show that there is predictable, identifiable "routine" insider trading that is not informative about firms' futures, and that the most informed opportunistic traders are local, nonexecutive insiders from geographically concentrated, poorly governed firms.
Journal ArticleDOI
Corporate Investment and Asset Price Dynamics: Implications for SEO Event Studies and Long-Run Performance
TL;DR: This article presented a rational theory of return behavior around seasoned equity offerings, including a pre-issuance price runup, negative announcement effect, and long-run post-issure underperformance.
Journal ArticleDOI
CEO network centrality and merger performance
TL;DR: In this article, the authors study the effects on M&A outcomes of CEO network centrality, which measures the extent and strength of a CEO's personal connections, and find that high-centrality CEOs are able to avoid the discipline of the markets for corporate control and the executive labor market, and that the mitigating effect of internal governance on CEO actions is limited.
Journal ArticleDOI
Corporate Investment and Asset Price Dynamics: Implications for SEO Event Studies and Long‐Run Performance
TL;DR: In this paper, the authors present a rational theory of seasoned equity offering (SEO) that explains a pre-issuance price run-up, a negative announcement effect, and long-run post-issure underperformance.
References
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Journal ArticleDOI
The New Issues Puzzle
Tim Loughran,Jay R. Ritter +1 more
TL;DR: In this paper, the authors show that companies issuing stock during 1970 to 1990, whether an initial public offering (IPO) or a seasoned equity offering (SEO), significantly underperform relative to nonissuing firms for five years after the offering date.
Journal ArticleDOI
Detecting long-run abnormal stock returns: The empirical power and specification of test statistics
Brad M. Barber,John D. Lyon +1 more
TL;DR: In this paper, the empirical power and specification of test statistics in event studies designed to detect long-run (one to five-year) abnormal stock returns were analyzed and three reasons for this misspecification were identified.
Journal ArticleDOI
Improved Methods for Tests of Long-Run Abnormal Stock Returns
TL;DR: Barber and Lyon as mentioned in this paper analyzed tests for long-run abnormal returns and document that two approaches yield well-specified test statistics in random samples, but misspecification in non-random samples is pervasive.
Journal ArticleDOI
Market underreaction to open market share repurchases
TL;DR: In this article, the authors examine long run firm performance following open market share repurchase announcements, 1980-1990, and find that the average abnormal four-year buy-and-hold return measured after the initial announcement is 12.1%.
Journal ArticleDOI
Insiders' profits, costs of trading, and market efficiency
TL;DR: In this paper, the anomalous findings of the previous insider trading studies that any investor can earn abnormal profits by reading the Ofi&/Summan were investigated by using approximately 60,000 insider sale and purchase transactions from 1975 to 1981.