We examine the stock price behavior associated with public offerings of common stock and convertible debt that are withdrawn by the issuing firm, as well as the stock price behavior associated with completed offerings. We find that stock returns are negative in the period from the announcement to the withdrawal, and are statistically insignificant from the announcement to the issuance. Stock returns are positive at the withdrawal and negative at the issuance. Furthermore, the average stock returns associated with withdrawals are significantly different from zero only when the reported reason for the withdrawals is unfavorable market conditions. Our evidence suggests that managers' decisions to withdraw equity offerings depend on recent stock price behavior, and that managers' decisions convey information about firm value to market participants.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. 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.
Volume (Year): 23 (1988) Issue (Month): 02 (June) Pages: 119-133 Download reference. The following formats are available: HTML
(with abstract),
plain text
(with abstract),
BibTeX,
RIS (EndNote, RefMan, ProCite),
ReDIF
Contact details of provider: Postal: The Edinburgh Building, Shaftesbury Road, Cambridge CB2 2RU UK Fax: +44 (0)1223 325150 Email: Web page: http://journals.cambridge.org/jid_JFQ
For technical questions regarding this item, or to correct its listing, contact: (Mike Eden).
Related research
Keywords:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)