Download or read book Long-Run Stock Returns Following Seasoned Equity Offerings written by Katherine Spiess and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We document that firms making seasoned equity offerings during 1975-1989 substantially under-performed a sample of matching firms from the same industry and of similar size that did not issue equity. Specifically, returns in the five-year period following a seasoned equity offering are, on average, 31.2 percent lower than those of non-issuing matched firms. This long-run underperformance persists even after controlling for trading system, firm book-to-market ratio, firm size, and firm age. It is similar to that previously documented for initial public offerings, implying that managers may be able to take advantage of overvaluation in both the initial and seasoned equity offerings markets.