Tough times for seasoned equity offerings: performance during the COVID pandemic

Christian Flore, Dirk Schiereck and Marc Zenzius

Publications of Darmstadt Technical University, Institute for Business Studies (BWL) from Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL)

Abstract: This study analyzes the wealth effects of SEO announcements in the US during the COVID-19 pandemic and its main determinants. We find significantly negative abnormal returns of − 8.6%. This provides persuasive evidence that capital markets reacted particularly negative during this period, reflecting higher degrees of uncertainty. We furthermore find that larger firms experience a better SEO performance and that COVID-19 related biotech & healthcare firms react particularly negative. This effect is more negative the lower the company valuation beforehand.

Date: 2022-04-13
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Published in Journal of Business Economics 9 (2022-04-13) : pp. 1491-1510

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https://link.springer.com/article/10.1007/s11573-022-01089-6

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Persistent link: https://EconPapers.repec.org/RePEc:dar:wpaper:136278

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