The IPO and first seasoned equity sale: Issue proceeds, owner/managers' wealth, and the underpricing signal

Autor:	D. Katherine Spiess, Richard H. Pettway
Rok vydání:	1997
Předmět:	Economics and Econometrics Equity (finance) Owner managers Financial system Monetary economics Business Seasoned equity offering Market response Initial public offering Finance
Zdroj:	Journal of Banking & Finance. 21:967-988
ISSN:	0378-4266
DOI:	10.1016/s0378-4266(97)00014-9
Popis:	Recent models of IPO underpricing suggest that high-quality firms underprice their IPOs to differentiate themselves from low-quality firms and, thus, receive a more favorable market response to subsequent equity offerings. We test this suggestion for 172 industrial firms that made an initial public offering during 1987–1991 and made a subsequent seasoned equity offering within three years of their IPO. We examine two measures of the impact of the hypothesized underpricing signal net of the cost of employing that signal. Inconsistent with the underpricing signal hypothesis, we find no evidence that firms recover the cost of an underpriced IPO in either higher issue proceeds or in greater wealth for the firm's initial owners.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::2ed1d7a3794528aa8cd137112085bfae https://doi.org/10.1016/s0378-4266(97)00014-9 Zobrazit plný text záznamu Full Text from ScienceDirect