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Evidence and Implications of Increases in Trading Volume Around Seasoned Equity Offerings

journal contribution
posted on 2023-06-08, 11:46 authored by Surendranath R Jory, Thanh N Ngo
This paper examines whether managers time their seasoned equity offering (SEO) when the level of trading volume of the firm’s stock significantly increases relative to normal months. We hypothesize that once management of the issuing firm observes a significant positive increase in their stock’s trading volume, they interpret this increase in liquidity as an opportune time for the firm to float new shares. Using four different measures of abnormal trading volume, we find evidence that supports our hypothesis. Our results are robust even after controlling for various factors that have been previously found to be significant determinants of the SEO decision.

History

Publication status

  • Published

Journal

Journal of Financial and Economic Practice

ISSN

1937-6820

Issue

2

Volume

10

Page range

45-59

Department affiliated with

  • Business and Management Publications

Full text available

  • No

Peer reviewed?

  • Yes

Legacy Posted Date

2012-06-13

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