Does the Sequence of Seasoned Equity Offerings Matter?

28 Pages Posted: 6 Jan 2005

See all articles by Ranjan D'Mello

Ranjan D'Mello

Wayne State University - Department of Finance

Oranee Tawatnuntachai

Pennsylvania State University - School of Business Administration

Devrim Yaman

Western Michigan University

Abstract

We investigate the relation between announcement period returns and the sequence of seasoned equity offerings (SEOs) for industrial, financial, and utility firms making multiple offerings. For industrial firms, there is a monotonically positive relation between the returns and the sequence of issues. Further, the stock price reactions to the fourth and subsequent issues by industrial firms are insignificant. For firms that conduct at least two SEOs, there is no difference in returns between industrial firms and utilities or financial institutions. The lower negative returns for later announcements by industrial firms can be explained by reduced adverse selection costs.

Suggested Citation

D'Mello, Ranjan and Tawatnuntachal, Oranee and Yaman, Devrim, Does the Sequence of Seasoned Equity Offerings Matter?. Available at SSRN: https://ssrn.com/abstract=480987

Ranjan D'Mello (Contact Author)

Wayne State University - Department of Finance ( email )

328 Prentis Bldg.
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Oranee Tawatnuntachal

Pennsylvania State University - School of Business Administration ( email )

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Middletown, PA 17057-4898
United States
717-948-6160 (Phone)

Devrim Yaman

Western Michigan University ( email )

Kalamazoo, MI 49008
United States
269-387-5749 (Phone)

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