Search Results
Working Paper
Bank seasoned equity offers: do voluntary and involuntary offers differ?
Recent research has shown that for industrial and utilities? seasoned equity offers (SEOs) the offer price discount is informative and has significant price effects. We examine whether the offer price discount for SEOs made by undercapitalized banks is different from those made by banks that were already overcapitalized prior to issue announcement. The former are labeled "involuntary" issues, and the latter "voluntary." Voluntary issues are likely made by opportunistic managers at times when their stock is overvalued. Prior research has argued and provided evidence suggesting that for ...
Working Paper
Offer-price discount of bank seasoned equity offers: do voluntary and involuntary offers convey different information?
Seasoned equity offers made by undercapitalized banks (labeled involuntary offers) could be different from other seasoned equity offers because the issuer is presumably under regulatory duress to make up the shortfall in required capital. For this reason, involuntary offers may exhibit limited managerial opportunism. When a firm issues seasoned equity, investment bankers gather information about the issuer in the period between the registration of the offer and its issue date. The information gathered during the book-building process gets reflected in the offer price discount on the issue ...