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Frequent issuers' influence on long-run post-issuance returns

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  • Billett, Matthew T.
  • Flannery, Mark J.
  • Garfinkel, Jon A.

Abstract

Prior studies conclude that firms' equity underperforms following many individual sorts of external financing. These conclusions naturally raise significant questions about market efficiency and/or about the techniques used to measure long-run "abnormal returns." Rather than concentrating on a single security type or issuance, we examine long-run performance following any and all sorts of security issuances. Initial financing events do not associate with underperformance; however, subsequent financings do. Our results suggest that negative post-issuance returns have nothing to do with the specific type of security issued, and everything to do with the number of types of securities issued.

Suggested Citation

  • Billett, Matthew T. & Flannery, Mark J. & Garfinkel, Jon A., 2011. "Frequent issuers' influence on long-run post-issuance returns," Journal of Financial Economics, Elsevier, vol. 99(2), pages 349-364, February.
  • Handle: RePEc:eee:jfinec:v:99:y:2011:i:2:p:349-364
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    Cited by:

    1. 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.
    2. Nagano, Mamoru, 2016. "Who issues Sukuk and when?: An analysis of the determinants of Islamic bond issuance," Review of Financial Economics, Elsevier, vol. 31(C), pages 45-55.
    3. Amor, Salma Ben & Kooli, Maher, 2016. "Do acquisitions affect IPO long-run performance? Evidence from single vs. multiple acquirers," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 40(C), pages 63-79.
    4. Bessembinder, Hendrik & Zhang, Feng, 2013. "Firm characteristics and long-run stock returns after corporate events," Journal of Financial Economics, Elsevier, vol. 109(1), pages 83-102.
    5. Naaguesh Appadu & Anna Faelten & Mario Levis, 2013. "Acquisitions, SEOs, divestitures and IPO performance," Chapters,in: Handbook of Research on IPOs, chapter 17, pages 347-374 Edward Elgar Publishing.
    6. repec:kap:jfsres:v:53:y:2018:i:1:d:10.1007_s10693-016-0243-4 is not listed on IDEAS

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