Warrant Seos in an Emerging Market: Evidence from Thailand
Eckbo et al. (2006) point out that Seasoned Equity Offering (SEO) companies need to concern for flotation costs, both of direct and indirect, when issuing newly shares. Previous literatures (i.e. Burton et al., 1999; Masulis and Shivakumar, 2002; Corwin, 2003; and Walker and Yost, 2007), considered mainly stock price reaction and underpricing mostly in the U.S. and other developed markets. In contrast, there is paucity of literature on SEOs in Asian markets. The purpose of this paper is to extend our empirical works on Seasoned Equity Offering (SEO) in Thailand, particularly on the areas of stock price reaction and the post-issuing performance. Instead of common stock offerings, we identified 47 firms (of 173 SEO companies) issuing newly shares via warrants between 1999 and 2006. We found that there is a negative reaction of stock prices to SEO announcements. This outcome is consistent to our prior research on common stock issuing companies. With warrant issuing, the SEO firms are impacted by the offering dilution, in comparison with those issuing via common stocks. As these preliminary consequences in the first context, we propose to pay more attention in order to examine the post-issuing performance of warrant SEO firms.
|This chapter was published in: Polwat Lerskullawat , , pages S2_181-196, 2013.|
|This item is provided by ToKnowPress in its series Diversity, Technology, and Innovation for Operational Competitiveness: Proceedings of the 2013 International Conference on Technology Innovation and Industrial Management with number s2_181-196.pdf.|
|Contact details of provider:|| Web page: http://www.toknowpress.net/conferences |
References listed on IDEAS
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.:
- Marisetty, Vijaya B. & Marsden, Alastair & Veeraraghavan, Madhu, 2008. "Price reaction to rights issues in the Indian capital market," Pacific-Basin Finance Journal, Elsevier, vol. 16(3), pages 316-340, June.
- Michael Hertzel & Michael Lemmon & James S. Linck & Lynn Rees, 2002. "Long-Run Performance following Private Placements of Equity," Journal of Finance, American Finance Association, vol. 57(6), pages 2595-2617, December.
- Lewis, Craig M. & Rogalski, Richard J. & Seward, James K., 1998. "Agency Problems, Information Asymmetries, and Convertible Debt Security Design," Journal of Financial Intermediation, Elsevier, vol. 7(1), pages 32-59, January.
- Jan Bartholdy & Dennis Olson & Paula Peare, 2007.
"Conducting Event Studies on a Small Stock Exchange,"
The European Journal of Finance,
Taylor & Francis Journals, vol. 13(3), pages 227-252.
- Bartholdy, Jan & Olson, Dennis & Peare, Paula, 2006. "Conducting event studies on a small stock exchange," Finance Research Group Working Papers F-2006-03, University of Aarhus, Aarhus School of Business, Department of Business Studies.
- Ng, Chee K & Smith, Richard L, 1996. " Determinants of Contract Choice: The Use of Warrants to Compensate Underwriters of Seasoned Equity Issues," Journal of Finance, American Finance Association, vol. 51(1), pages 363-80, March.
- Chemmanur, T.J. & Fulghieri, P., 1994.
"Why Include Warrants in New Equity Issues? A Theory of Unit IPOs,"
95-05, Columbia - Graduate School of Business.
- Chemmanur, Thomas J. & Fulghieri, Paolo, 1997. "Why Include Warrants in New Equity Issues? A Theory of Unit IPOs," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 32(01), pages 1-24, March.
- A. Craig MacKinlay, 1997. "Event Studies in Economics and Finance," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 13-39, March.
- Asquith, Paul & Mullins, David Jr., 1986. "Equity issues and offering dilution," Journal of Financial Economics, Elsevier, vol. 15(1-2), pages 61-89.
- Gajewski, Jean-François & Ginglinger, Edith, 2002.
"Seasoned Equity Issues in a Closely Held Market: Evidence from France,"
Economics Papers from University Paris Dauphine
123456789/1949, Paris Dauphine University.
- Edith Ginglinger & Jean-François Gajewski, 2002. "Seasoned equity issues in a closely held market: evidence from France," Post-Print halshs-00138293, HAL.
- Timo P. Korkeamaki & William T. Moore, 2004. "Convertible Bond Design and Capital Investment: The Role of Call Provisions," Journal of Finance, American Finance Association, vol. 59(1), pages 391-405, 02.
- A. K. Mishra, 2007. "The Market Reaction To Stock Splits — Evidence From India," International Journal of Theoretical and Applied Finance (IJTAF), World Scientific Publishing Co. Pte. Ltd., vol. 10(02), pages 251-271.
- Eckbo, B. Espen & Masulis, Ronald W. & Norli, Oyvind, 2000. "Seasoned public offerings: resolution of the 'new issues puzzle'," Journal of Financial Economics, Elsevier, vol. 56(2), pages 251-291, May.
- Singh, Ajai K. & Cowan, Arnold R. & Nayar, Nandkumar, 1991. "Underwritten calls of convertible bonds," Journal of Financial Economics, Elsevier, vol. 29(1), pages 173-196, March.
- Teoh, Siew Hong & Welch, Ivo & Wong, T. J., 1998. "Earnings management and the underperformance of seasoned equity offerings," Journal of Financial Economics, Elsevier, vol. 50(1), pages 63-99, October.
- Mann, Steven V. & Moore, William T. & Ramanlal, Pradipkumar, 1999. "Timing of Convertible Debt Issues," Journal of Business Research, Elsevier, vol. 45(1), pages 101-105, May.
- Aktas, Nihat & de Bodt, Eric & Cousin, Jean-Gabriel, 2007. "Event studies with a contaminated estimation period," Journal of Corporate Finance, Elsevier, vol. 13(1), pages 129-145, March.
- Ranjan D'Mello & Oranee Tawatnuntachai & Devrim Yaman, 2003. "Does the Sequence of Seasoned Equity Offerings Matter?," Financial Management, Financial Management Association, vol. 32(4), Winter.
- Lewis, Craig M. & Rogalski, Richard J. & Seward, James K., 2001. "The long-run performance of firms that issue convertible debt: an empirical analysis of operating characteristics and analyst forecasts," Journal of Corporate Finance, Elsevier, vol. 7(4), pages 447-474, December.
When requesting a correction, please mention this item's handle: RePEc:tkp:tiim13:s2_181-196.pdf. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nada Trunk Širca)
If references are entirely missing, you can add them using this form.