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Sales of Secondary Shares in SEOs: A Comparison across Top Managers, Other Insiders, and Outsiders

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  • Sinan Gokkaya
  • Michael J. Highfield

Abstract

type="main"> This paper investigates the information content of registered insider sales in the Seasoned Equity Offering (SEO) process from 1997 to 2009. We find that initial market reactions and long-run post-issue stock performance are negatively related to C-level executive insider sales, but unrelated to participation by nonexecutive insiders. We also find significantly lower post-issue abnormal earnings surprises for SEOs with C-level executive sales. Overall, the findings are consistent with the predictions of asymmetric information and agency theories.

Suggested Citation

  • Sinan Gokkaya & Michael J. Highfield, 2014. "Sales of Secondary Shares in SEOs: A Comparison across Top Managers, Other Insiders, and Outsiders," Financial Management, Financial Management Association International, vol. 43(4), pages 757-794, December.
    • Handle: RePEc:bla:finmgt:v:43:y:2014:i:4:p:757-794
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    File URL: http://hdl.handle.net/10.1111/fima.12055
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    Cited by:

    1. J. Barry Lin, 2017. "The Curious Announcement Effect of Combined SEOs," Proceedings of Business and Management Conferences 5607632, International Institute of Social and Economic Sciences.

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