The long-run performance of seasoned stock-warrant unit offerings

Sabri Boubaker and Hatem Mansali ()
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Hatem Mansali: IFGT, Université Tunis El Manar, Tunisia

Economics Bulletin, 2022, vol. 42, issue 2, 609 - 628

Abstract: This paper investigates the long-run performance of unit offering firms in France. Studying the period 1991–2020, the empirical results show a low subsequent long-run stock performance and post-issue decline in operating performance over 3- and 5-year periods, suggesting that unit offering firms underperform in the long-run. Additional analyses on the intended use of the proceeds show that the underperformance in the long-run of unit seasoned offerings does not depend on the intended use of the proceeds, consistent with the rationale that unit offering firms were overvalued at issuing and experienced a pre-issuance run-up. Overall, the results are in accordance with the behavioral explanation.

Keywords: Unit offerings; Warrants; Seasoned equity offering; Long-term performance (search for similar items in EconPapers)
JEL-codes: G3 (search for similar items in EconPapers)
Date: 2022-06-30
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