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Wealth Effects of Seasoned Equity Offerings: A Meta‐Analysis

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  • Chris Veld
  • Patrick Verwijmeren
  • Yuriy Zabolotnyuk

Abstract

We use meta‐analysis to review studies on announcement effects associated with seasoned equity offerings. Our sample includes 199 studies from 38 leading finance journals and Social Sciences Research Network working papers. The studies cover different countries, but the US is particularly well‐represented with 131 studies. We find a statistically significant mean cumulative abnormal return of −0.98%. Abnormal returns are more negative for equity issues by US companies and for non‐US rights issues and are less negative for private placements. In addition, wealth effects are more negative when the proceeds are used for debt reduction, when the SEO is issued shortly after IPO, and for issues by nondividend‐paying companies and industrial companies. We identify important avenues for future research.

Suggested Citation

  • Chris Veld & Patrick Verwijmeren & Yuriy Zabolotnyuk, 2020. "Wealth Effects of Seasoned Equity Offerings: A Meta‐Analysis," International Review of Finance, International Review of Finance Ltd., vol. 20(1), pages 77-131, March.
    • Handle: RePEc:bla:irvfin:v:20:y:2020:i:1:p:77-131
    DOI: 10.1111/irfi.12218
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    Cited by:

    1. Geyer-Klingeberg, Jerome & Hang, Markus & Rathgeber, Andreas, 2020. "Meta-analysis in finance research: Opportunities, challenges, and contemporary applications," International Review of Financial Analysis, Elsevier, vol. 71(C).
    2. Daniel Broxterman & Tingyu Zhou, 2023. "Information Frictions in Real Estate Markets: Recent Evidence and Issues," The Journal of Real Estate Finance and Economics, Springer, vol. 66(2), pages 203-298, February.
    3. Prasad, Mason & Bakry, Walid & Varua, Maria Estela, 2021. "Abnormal volatility in seasoned equity offerings during economic disruptions," Journal of Behavioral and Experimental Finance, Elsevier, vol. 30(C).
    4. Massimo Giuliodori & Jan Kakes & Dimitris Mokas, 2022. "Banks’ Seasoned Equity Offerings Announcements and Central Bank Lending Operations," Working Papers 748, DNB.

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