The long run performance of UK firms making multiple rights issues

Abdullah Iqbal, Saeed Akbar and Radha K. Shiwakoti

International Review of Financial Analysis, 2013, vol. 28, issue C, 156-165

Abstract: This study examines the long run performance of firms offering multiple rights issues in the UK and differentiates between one-time and multiple issuers. By analysing a sample of 1146 rights issues offered by 788 London Stock Exchange listed industrial companies between 1988 and 2008, this study reports that firms making multiple rights issues do not experience significant long run underperformance following the third or subsequent issues. However, the one-time rights issuers do experience underperformance during the sample period. The findings of this study thus imply that those firms which are making multiple rights issues are of better quality and investors could avoid loses by investing in firms which had made more than one rights issue in the past. The results also suggest that researchers which are intending to examine the long run post-event performance of firms should control the incidence of similar events that had happened in previous years.

Keywords: Rights issues; Operating performance; Returns; Sequence in equity issues; Seasoned equity offerings; Multiple rights issues (search for similar items in EconPapers)
JEL-codes: G14 G30 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:28:y:2013:i:c:p:156-165

DOI: 10.1016/j.irfa.2013.03.003

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