Long-run Stock Performance of Equity-Issuing Firms: The Case of Private Placements in Singapore

Sheng-Syan Chen, Kim Wai Ho, Cheng Few Lee and Gillian H. H. Yeo
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Sheng-Syan Chen: Yuan-Ze University, R.O.C.
Kim Wai Ho: Nanyang Technological University, Singapore
Gillian H. H. Yeo: Nanyang Technological University, Singapore

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2002, vol. 05, issue 03, 417-438

Abstract: We find that Singapore listed firms which have conducted private placements subsequently experience long-run stock underperformance. The long-run underperformance is more severe for small firms and firms with a higher book-to-market ratio. This suggests that small firms and firms with poorer growth prospects are more likely to time the issue when the stock is temporarily overvalued. Further more, we find a positive relation between the long-run stock performance and the change in ownership concentration of the issuing firms, which is consistent with the alignment-of-interests hypothesis. We do not find evidence supporting the earnings-management hypothesis.

Keywords: Long-run stock returns; Equity offerings; Private placements; Emerging markets (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (4)

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DOI: 10.1142/S0219091502000766

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