Do firms mislead investors by overstating earnings before seasoned equity offerings?

• 成果类型: Article
• 署名作者: Shivakumar, L
• 署名单位: University of London; London Business School
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/S0165-4101(00)00026-4
• 发表日期: 2000
• 关键词: PUBLIC OFFERINGS; stock returns; management; UNDERPERFORMANCE; performance; INFORMATION; INVESTMENT; decisions; MARKETS

摘要

I examine earnings management around seasoned equity offerings and, consistent with Rangan (J. Financial Econ. 50 (1998) 101) and Teoh et al. (J. Financial Econ. 50(1998) 63), find evidence of earnings management around the offerings. However, in contrast to their conclusions, I show that investors infer earnings management and rationally undo its effects at equity offering announcements. The investor naivete conclusion of Teoh ct al. (J. Financial Econ. 50(1998) 63) and Rangan (J. Financial Econ. 50(1998) 101) appears to be due to test: misspecification. I conclude that seasoned equity issuers' earnings management may not be designed to mislead investors, but may merely reflect the issuers' rational response to anticipated market behavior at offering announcements. (C) 2000 Elsevier Science B.V. All rights reserved. JEL classification: G14; M41.