Using a large database of U.S. seasoned equity offering (SEO) announcements from 2010 to 2015, we examine the effects of several explanatory variables-firm specific, macroeconomic, fixed income, and stock market variables-on the announcement period abnormal stock returns and on the longer-run...

Models of seasoned equity offerings (SEOs) such as Myers and Majluf (1984) assume that all investors in the economy pay immediate attention to SEO announcements and the pricing of SEOs. In this paper, we analyze, theoretically and empirically, the implications of only a fraction of investors in...

We find that seasoned equity issuers who pay more in underwriting costs are associated with larger improvements in investor recognition, greater contemporaneous increases in firm value, and larger declines in illiquidity risk. We identify increased analyst following as an important channel...

This paper provides an empirical link between the expected cost of equity and firms' Seasoned Equity Offerings activities, using a novel measure of forward-looking cost of equity. There is a negative impact of expected cost equity on SEO likelihood and amount of proceeds, exists on both market...

Hard-to-value stocks provide opportunities for managers to exploit their informational advantage through trading on their firms' and their own personal accounts. In contrast to the prediction that such transactions reflect private information about future events, they are contrarian and heavily...

Investor sentiment affects stock market liquidity by affecting noise trading and irrational market makers. Previous studies have focused on this effect with the time-series variation in sentiment and liquidity. This paper utilizes firm-specific news sentiment (FSNS) to examine its effect on...

We document that investor sentiment is positively related with pre-SEO overpricing and plays an important role in managers' equity issuance decisions. Further, we provide evidence that investor sentiment impacts the SEO discounting and underpricing. High sentiment periods are followed by low...

Based on full-displayed limit order book data from the electronic trading system Xetra, I study traders' tendency to herd in their decisions to buy or to sell securities around the time of news release. In more detail, I study the impact of company-specific, real-time messages routed by Reuters...

Using a large dataset of news releases, we study instances of investors' mistaken reaction, or misreaction, to news. We define misreaction as stock prices moving in the direction opposite to the news when it is released. We find that news tone predicts returns in the cross-section only upon the...

Recent advances in natural language processing have contributed to the development of market sentiment measures through text content analysis in news providers and social media. The effectiveness of these sentiment variables depends on the implemented techniques and the type of source on which...