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The long-run performance of seasoned stock-warrant unit offerings

Author

Listed:
  • Sabri Boubaker

    (EM Normandie Business School, Métis Lab, France)

  • Hatem Mansali

    (IFGT, Université Tunis El Manar, Tunisia)

Abstract

This paper investigates the long-run performance of unit offering firms in France. Studying the period 1991–2020, the empirical results show a low subsequent long-run stock performance and post-issue decline in operating performance over 3- and 5-year periods, suggesting that unit offering firms underperform in the long-run. Additional analyses on the intended use of the proceeds show that the underperformance in the long-run of unit seasoned offerings does not depend on the intended use of the proceeds, consistent with the rationale that unit offering firms were overvalued at issuing and experienced a pre-issuance run-up. Overall, the results are in accordance with the behavioral explanation.

Suggested Citation

  • Sabri Boubaker & Hatem Mansali, 2022. "The long-run performance of seasoned stock-warrant unit offerings," Economics Bulletin, AccessEcon, vol. 42(2), pages 609-628.
    • Handle: RePEc:ebl:ecbull:eb-21-01104
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    File URL: http://www.accessecon.com/Pubs/EB/2022/Volume42/EB-22-V42-I2-P51.pdf
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    More about this item

    Keywords

    Unit offerings; Warrants; Seasoned equity offering; Long-term performance;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance

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