Post-SEO Performance in the Recovery Phase of the Financial Crisis
(2015) BUSN89 20151Department of Business Administration
- Abstract
- This thesis focuses on seasoned equity offerings and aims to examine announcement effects and long-run performance of SEO firms on the Swedish stock exchanges, during the recovery phase of the global financial crisis. Also, an OLS regression is run in order to explain post-SEO performance using the independent variables book-to-market ratio, market capitalization and the firms’ number of SEOs during the time period.
The study takes on a deductive approach measuring and analyzing SEO firms’ performance, meaning that hypotheses are deduced based on earlier research and theory. Earlier studies and theory generally suggest negative announcement effects, along with long-run underperformance of firms that issue seasoned equity.
The... (More) - This thesis focuses on seasoned equity offerings and aims to examine announcement effects and long-run performance of SEO firms on the Swedish stock exchanges, during the recovery phase of the global financial crisis. Also, an OLS regression is run in order to explain post-SEO performance using the independent variables book-to-market ratio, market capitalization and the firms’ number of SEOs during the time period.
The study takes on a deductive approach measuring and analyzing SEO firms’ performance, meaning that hypotheses are deduced based on earlier research and theory. Earlier studies and theory generally suggest negative announcement effects, along with long-run underperformance of firms that issue seasoned equity.
The sample consists of Swedish firms listed on NASDAQ OMX Stockholm and First North. More specifically, the sample includes a total of 123 observations measuring announcement effects and 81 observations measuring long-run performance. The results generated by the study show clear signs of negative announcement effects and long-run underperformance for Swedish SEO firms during the time period. However, long-run underperformance cannot be concluded for SEO firms listed on First North during the time period. Moreover, the independent variable for number of SEOs is negatively significant for firms listed on NASDAQ OMX Stockholm. The results suggest that signaling theories, which say that an SEO has a negative impact on firm value, are applicable on the Swedish stock markets. Furthermore, interpreting the results hint that the markets have not been efficient in terms of initial re-evaluation of stock prices after information of SEO announcements. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/7471645
- author
- Östgren, Richard LU and Brunskog, Erik LU
- supervisor
- organization
- course
- BUSN89 20151
- year
- 2015
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Seasoned Equity Offering, SEO, Announcement Effects, Long-Run Performance, Event Study, Cumulative Abnormal Return, Market Efficiency, Swedish Stock Markets.
- language
- English
- id
- 7471645
- date added to LUP
- 2015-07-01 10:29:16
- date last changed
- 2015-07-01 10:29:16
@misc{7471645,
abstract = {{This thesis focuses on seasoned equity offerings and aims to examine announcement effects and long-run performance of SEO firms on the Swedish stock exchanges, during the recovery phase of the global financial crisis. Also, an OLS regression is run in order to explain post-SEO performance using the independent variables book-to-market ratio, market capitalization and the firms’ number of SEOs during the time period.
The study takes on a deductive approach measuring and analyzing SEO firms’ performance, meaning that hypotheses are deduced based on earlier research and theory. Earlier studies and theory generally suggest negative announcement effects, along with long-run underperformance of firms that issue seasoned equity.
The sample consists of Swedish firms listed on NASDAQ OMX Stockholm and First North. More specifically, the sample includes a total of 123 observations measuring announcement effects and 81 observations measuring long-run performance. The results generated by the study show clear signs of negative announcement effects and long-run underperformance for Swedish SEO firms during the time period. However, long-run underperformance cannot be concluded for SEO firms listed on First North during the time period. Moreover, the independent variable for number of SEOs is negatively significant for firms listed on NASDAQ OMX Stockholm. The results suggest that signaling theories, which say that an SEO has a negative impact on firm value, are applicable on the Swedish stock markets. Furthermore, interpreting the results hint that the markets have not been efficient in terms of initial re-evaluation of stock prices after information of SEO announcements.}},
author = {{Östgren, Richard and Brunskog, Erik}},
language = {{eng}},
note = {{Student Paper}},
title = {{Post-SEO Performance in the Recovery Phase of the Financial Crisis}},
year = {{2015}},
}