Influence of media coverage and sentiment on seasoned equity offerings |
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| Authors: | Ji Sun Yi Zhou Jiaguo Wang Jie Guo |
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| Affiliation: | 1. China Institute of Finance and Capital Markets, Beijing, China;2. School of Management, Fudan University, Shanghai, China;3. Department of Accounting and Finance, Lancaster University Management School, Lancaster, UK;4. Durham Business School, University of Durham, Durham, UK |
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| Abstract: | This article examines the role of media in seasoned equity offerings (SEOs) price and market reactions on SEO announcements. Using a sample of SEO deals in UK, we find that media coverage is significantly and negatively related to SEO price discounts and market returns around SEO announcements. Moreover, we document that more pessimistic media sentiment predicts larger SEO price discounts and more negative market reactions to SEO announcements. In summary, both media coverage and media sentiment influence investor decisions in SEOs, but through different mechanisms. |
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| Keywords: | Announcement return Media coverage Media sentiment Offer discount Seasoned equity offerings |
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