Price Pressure and Overnight Seasoned Equity Offerings

Research output: Contribution to journalArticlepeer-review

5 Scopus citations

Abstract

Between 2009 and 2014, 75% of seasoned equity offerings (SEOs) were announced and issued overnight, compared to 27% between 2000 and 2008. Overnight issuers obtain a higher SEO offer price because they experience more favorable pre-offer returns. Consistent with these favorable returns being due to the avoidance of pre-issue selling pressure, non-overnight issuers experience a 2.5% pre-issue stock-price decline that reverses within 7 days. This post-issue reversal is increasing in SEO offer size and bigger following large pre-issue price declines. In contrast, returns following overnight offerings are less positive and unrelated to SEO offer size or pre-issue returns.

Original languageEnglish (US)
Pages (from-to)837-866
Number of pages30
JournalJournal of Financial and Quantitative Analysis
Volume53
Issue number2
DOIs
StatePublished - Apr 1 2018

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

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