6533b7cffe1ef96bd1259815
RESEARCH PRODUCT
Equity Issues in the Spanish Stock Market: Windows of Opportunity, Earnings Management or Market Timing?
C. José GarcíaJosé Emilio Farinós ViñasAna M. Ibáñezsubject
Equity riskEquity (finance)Stock marketFinancial systemMonetary economicsBusinessMarket sentimentSeasoned equity offeringMarket timingInitial public offeringEquity capital marketsdescription
We investigate whether the market sentiment and/or the specific operating performance of firms that conducted an equity issue on the Spanish stock market during the period 1993-2000 are related to the long-run stock-return underperformance in the year following the issue of small and medium firms. Our results reveal that equity issues were conducted by large firms just when the market showed optimistic expectations towards large firms in general. This overoptimism towards large issue firms was related to the 1990s technology boom in the case of initial public offerings (IPO), but we detect earnings management by large firms that conducted a seasoned equity offering (SEO). In this context, small and medium issuers took advantage of the investors' sentiment towards large firms in order to conduct their overpriced stock issues.
| year | journal | country | edition | language |
|---|---|---|---|---|
| 2005-01-01 | SSRN Electronic Journal |