Influence of media coverage and sentiment on seasoned equity offerings

Ji Sun, Yi Zhou, Jiaguo (George) Wang and Jie (Michael) Guo

Accounting and Finance, 2020, vol. 60, issue S1, 557-585

Abstract: This article examines the role of media in seasoned equity offerings (SEOs) price and market reactions on SEO announcements. Using a sample of SEO deals in UK, we find that media coverage is significantly and negatively related to SEO price discounts and market returns around SEO announcements. Moreover, we document that more pessimistic media sentiment predicts larger SEO price discounts and more negative market reactions to SEO announcements. In summary, both media coverage and media sentiment influence investor decisions in SEOs, but through different mechanisms.

Date: 2020
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