Investor sentiment, SEO market timing, and stock price performance

Yi-Wen Chen, Robin K. Chou and Chu-Bin Lin

Journal of Empirical Finance, 2019, vol. 51, issue C, 28-43

Abstract: This article details an investigation of the impact of investor sentiment on the probability of firms conducting seasoned equity offerings (SEOs) and on stock price performance around and subsequent to SEOs. The results show that investor sentiment has a positive impact on SEO probability and that this impact is stronger for small and young firms. Furthermore, firms conducting SEOs during high sentiment periods experience less severe short-run price drops around the issuance yet more severe post-issue long-run underperformance, compared with firms conducting SEOs during low sentiment periods. These effects of investor sentiment on stock price performance are stronger for small, young, and high market-to-book ratio firms.

Keywords: Investor sentiment; Market timing; Seasoned equity offering (search for similar items in EconPapers)
JEL-codes: G02 G14 G32 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:empfin:v:51:y:2019:i:c:p:28-43

DOI: 10.1016/j.jempfin.2019.01.008

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