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

Jory, Surendranath R and Ngo, Thanh N (2010) Evidence and Implications of Increases in Trading Volume Around Seasoned Equity Offerings. Journal of Financial and Economic Practice, 10 (2). pp. 45-59. ISSN 1937-6820

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Abstract

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.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Business and Management
Subjects: H Social Sciences > HG Finance > HG0178 Liquidity
Depositing User: Surendranath Jory
Date Deposited: 13 Jun 2012 14:01
Last Modified: 03 Jul 2013 13:53
URI: http://sro.sussex.ac.uk/id/eprint/39567
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