Do firms knowingly sell overvalued equity?

• 成果类型: Article
• 署名作者: Lee, I
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.2307/2329442
• 发表日期: 1997
• 页码: 1439-1466
• 关键词: MARKET-EFFICIENCY; stock returns; issues; INFORMATION; OFFERINGS; ISSUANCE; INSIDERS

摘要

This article examines the relation between top executives' trading and the long-run stock returns of seasoned equity issuing firms. Primary issuers, who sell mostly newly-issued primary shares, significantly underperform their benchmarks, regardless of the top executives' prior trading pattern. However, top executives' trading is reliably associated with the stock returns of secondary issuers, who sell mostly secondary shares previously held by existing shareholders. On average, secondary issuers do not underperform their benchmarks. The results suggest;hat increased free cash flow problems after issue play an important role in explaining the underperformance of issuing firms.