Date of this Version
Journal of Financial Economics
We examine whether a distinct equity issuer underperformance anomaly exists. In a sample of initial public offering (IPO) and seasoned equity offering (SEO) firms from 1975 to 1992, we find that underperformance is concentrated primarily in small issuing firms with low book-to-market ratios. SEO firms, that underperform these standard benchmarks have time series returns that covary with factor returns constructed from nonissuing firms. We conclude that the stock returns following equity issues reflect a more pervasive return pattern in the broader set of publicly traded companies.
© 2000. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/.
Brav, A., Geczy, C. C., & Gompers, P. A. (2000). Is the Abnormal Return Following Equity Issuances Anomalous?. Journal of Financial Economics, 56 (2), 209-249. http://dx.doi.org/10.1016/S0304-405X(00)00040-4
Date Posted: 27 November 2017
This document has been peer reviewed.