Seasoned equity offerings and the short- and long-run performance of initial public offerings in the UK
AbstractIn contrast to the US practice, rights issues is the predominant method of raising additional equity capital in the London market. the UK evidence for the period 1980-1991 provides no support to the hypothesis that IPO firms deliberately underprice to signal their quality and facilitate subsequent seasoned equity offerings. the level of initial returns is related neither to the size of the issue nor to the price response at the announcement of a rights issue. the results demonstrate, however, that firms with higher first day returns are quicker in returning to the market for additional equity capital. There is also strong evidence to suggest that the announcement of a seasoned equity offering follows a period of significant rises in the stock prices of reissuing firms. Such gains are, however, dissipated quickly in the 18 months after the announcement of the seasoned equity offering. the level of underperformance is particularly pronounced for firms that raised relatively small subsequent amounts of capital in relation to funds raised at the initial offering. Thus, the paper documents a pattern of post-issue behaviour which is fundamentally similar for both unseasoned and seasoned equity offerings. Copyright Blackwell Publishers Ltd. 1995.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by European Financial Management Association in its journal European Financial Management.
Volume (Year): 1 (1995)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=1354-7798
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Kabir, Rezaul, 2003. "Corporate Financing in The Netherlands: Some Empirical Evidence," EIFC - Technology and Finance Working Papers 32, United Nations University, Institute for New Technologies.
- Kabir, R. & Roosenboom, P.G.J., 2002.
"Can the stock market anticipate future operating performance? Evidence from equity rights issues,"
ERIM Report Series Research in Management
ERS-2002-102-F&A, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
- Kabir, Rezaul & Roosenboom, Peter, 2003. "Can the stock market anticipate future operating performance? Evidence from equity rights issues," Journal of Corporate Finance, Elsevier, vol. 9(1), pages 93-113, January.
- Kabir, M.R. & Roosenboom, P.G.J., 2000. "Can the Stock Market anticipate Future Operating Performance? Evidence from Equity Rights Issues," Discussion Paper 2000-22, Tilburg University, Center for Economic Research.
- Wang, Junbo & Wei, K.C. John & Pruitt, Stephen W., 2006. "An analysis of the share price and accounting performance of rights offerings in China," Pacific-Basin Finance Journal, Elsevier, vol. 14(1), pages 49-72, January.
- Cai, Jun & Loughran, Tim, 1998. "The performance of Japanese seasoned equity offerings, 1971-1992," Pacific-Basin Finance Journal, Elsevier, vol. 6(5), pages 395-425, November.
- Hatem Mansali, 2009. "La gestion des résultats et les performances comptables à long terme des entreprises françaises émettrices d’actions," Revue Finance Contrôle Stratégie, revues.org, vol. 12(4), pages 39-83, December.
- Michel DUBOIS & Pierre JEANNERET, 2000. "The Long-run Performance of Seasoned Equity Offerings with rights evidence from the Swiss Market," FAME Research Paper Series rp22, International Center for Financial Asset Management and Engineering.
- Balachandran, Balasingham & Faff, Robert & Jong, Len, 2005. "Announcements of bonus share options: Signalling of the quality of firms," Global Finance Journal, Elsevier, vol. 16(2), pages 180-190, December.
- Iqbal, Abdullah & Akbar, Saeed & Shiwakoti, Radha K., 2013. "The long run performance of UK firms making multiple rights issues," International Review of Financial Analysis, Elsevier, vol. 28(C), pages 156-165.
- Huyghebaert, Nancy & Van Hulle, Cynthia, 2006. "Structuring the IPO: Empirical evidence on the portions of primary and secondary shares," Journal of Corporate Finance, Elsevier, vol. 12(2), pages 296-320, January.
- Pajuste, Anete, 2005. "Determinants and consequences of the unification of dual-class shares," Working Paper Series 0465, European Central Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.