Role of market timing and market conditions: Evidence from seasoned equity offerings

Wadhwa, Kavita; Syamala, Sudhakara Reddy

doi:10.1016/j.najef.2018.07.010

Cited by 9 publications

(2 citation statements)

References 18 publications

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“…Another unfavorable consequence determined in the literature is the underperformance of firms regarding the long-term post-SEO performance (Da Cunha and Seetharam 2018;Hsu et al 2016;Wadhwa and Syamala 2018;Yang et al 2013). Dasilas and Leventis (2013) stated that firms that announce an SEO will underperform for two years following the announcement.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Yang et al (2013) detected that aggressive earnings management is responsible for the poor long-term performance after the occurrence of the SEO (see also Beyer et al 2018;Deng and Ong 2018;Shivakumar 2000;Teoh et al 1998). In a study of the Indian market, long-term negative performance of firms after the issuance of SEOs was linked to market timing issues (Wadhwa and Syamala 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

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Seasoned Equity Offerings and Differences in Share-Price Impact by Firm Categories

Abdullah

Zaby

2021

IJFS

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The seasoned equity offering (SEO) market plays a significant role in the economic development of a country by providing liquidity for ongoing commercialization and innovation. This study is a comprehensive analysis of 149 SEOs and their effect on share prices in Thailand between 2009 and 2019. SEOs are categorized based on their time categories (early, mid, and grown) and volume categories (small, medium, big, and super). Using the event study methodology (multi-factor model), we find that most SEOs under both categories have a negative cumulative abnormal return (CAR) in the window period. Ranking the types of SEOs reveals that grown SEOs have the highest proportion of negative CAR under the time categories. Under the volume categories, medium SEOs show the largest share. The results were validated by regression assumption tests provided by Gnu Regression, Econometrics and Time-series Library, and correspond to established theories. The paper also contains an extensive literature review of studies examining the link between SEOs and share-price development. Our findings have important implications for corporations, investors, and regulatory bodies and can thus help in increasing market confidence for sustainable corporate funding.

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