Influence of Secondary Offerings on the Liquidity and Trading Activity of Stocks Outstanding

Miguel A. Acedo, Fco. Javier Ruiz and Rafael Santamaría ()
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Miguel A. Acedo: University of La Rioja, http://www.unirioja.es/
Fco. Javier Ruiz: University of La Rioja, http://www.unirioja.es/
Rafael Santamaría: Public University of Navarra, http://www.unavarra.es/

Czech Journal of Economics and Finance (Finance a uver), 2008, vol. 58, issue 01-02, 21-37

Abstract: This paper examines the influence of secondary offerings (SOs) on the liquidity and trading activity of stocks outstanding. The results reveal that liquidity and trading activity increase after the execution of SOs. We observe that the offering discount is explained by the size of the offering and its retail composition. We have also shown that changes in liquidity and trading activity are explained by the retail composition of the offering, such that the choice of ownership structure is decisive in the level of liquidity afforded by SOs. The offering discount is one of the chosen methods of attracting small-scale investors and promoting share liquidity following these operations.

Keywords: secondary offerings (SOs); liquidity; trading activity; microstructure; capital structure (search for similar items in EconPapers)
JEL-codes: G14 (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:fau:fauart:v:58:y:2008:i:1-2:p:21-37

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