The role of institutional investors in seasoned equity offerings

• 成果类型: Article
• 署名作者: Chemmanur, Thomas J.; He, Shan; Hu, Gang
• 署名单位: Boston College; Louisiana State University System; Louisiana State University; Babson College
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2008.12.011
• 发表日期: 2009
• 页码: 384-411
• 关键词: institutional investors; Seasoned equity offerings; Manipulative trading; Information production; SEO allocations

摘要

Do institutional investors possess private information about seasoned equity offerings (SEOs)? If so, do they use this private information to trade in a direction opposite to this information (a manipulative trading role) or in the same direction (an information production role)? We use a large sample of transaction-level institutional trading data to distinguish between these two roles of institutional investors. We explicitly identify institutional SEO allocations for the first time in the literature. We analyze the consequences of the private information possessed by institutional investors for SEO share allocation, institutional trading before and after the SEO and realized trading profitability, and the SEO discount. We find that institutions are able to identify and obtain more allocations in SEOs with better long-run stock returns, they trade in the same direction as their private information, and their post-SEO trading significantly outperforms a naive buy-and-hold trading strategy. Further, more pre-offer institutional net buying and larger institutional SEO allocations are associated with a smaller SEO discount. Overall, our results are consistent with institutions possessing private information about SEOs and with an information production instead of a manipulative trading role for institutional investors in SEOs. (C) 2009 Elsevier B.V. All rights reserved.