Investor sentiment,SEO market timing,and stock price performance |
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| Institution: | 1. Graduate School of Economics, Kyushu University, 6-19-1, Hakozaki, Higashiku, Fukuoka 812-8581, Japan;2. Faculty of Economics, Kyushu University, 6-19-1, Hakozaki, Higashiku, Fukuoka 812-8581, Japan;3. School of Economics and Management, China University of Geosciences, 388 Lumo Road, Wuhan, Hubei 430074, China;1. College of Management, Yuan Ze University, No. 135, Yuan-Tung Road, Chung-Li, Taiwan;2. Department of Business Administration, College of Business, National Taipei University, No. 151, University Rd., New Taipei City, Taiwan;3. Department of Statistics, College of Business, National Taipei University, No. 151, University Rd., New Taipei City, Taiwan;1. Department of Finance, University of Akron, Akron, OH 44325, United States;2. Department of Finance, University of Central Florida, Orlando, FL 32816-1400, United States;1. Itarle AG, Switzerland;2. School of Management, University of Bath, UK;3. Essex Business School, University of Essex, UK |
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| Abstract: | This article details an investigation of the impact of investor sentiment on the probability of firms conducting seasoned equity offerings (SEOs) and on stock price performance around and subsequent to SEOs. The results show that investor sentiment has a positive impact on SEO probability and that this impact is stronger for small and young firms. Furthermore, firms conducting SEOs during high sentiment periods experience less severe short-run price drops around the issuance yet more severe post-issue long-run underperformance, compared with firms conducting SEOs during low sentiment periods. These effects of investor sentiment on stock price performance are stronger for small, young, and high market-to-book ratio firms. |
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| Keywords: | Investor sentiment Market timing Seasoned equity offering |
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