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Order Flow Patterns around Seasoned Equity Offerings and their Implications for Stock Price Movements

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  • SAHN‐WOOK HUH
  • AVANIDHAR SUBRAHMANYAM

Abstract

In this study, we employ order imbalance measures to provide evidence that there is cross‐sectional heterogeneity in investor reactions to seasoned equity offerings (SEOs). The normally positive relation between imbalances and returns disappears for trade number imbalances but remains intact for dollar imbalances following SEOs. The return‐imbalance delinkage is most pronounced for SEO stocks in which institutions (non‐institutions) are net sellers (buyers). We also find that the SEO portfolio in which large institutional investors are net sellers strongly underperforms the complementary portfolio in which they are net buyers.

Suggested Citation

  • Sahn‐Wook Huh & Avanidhar Subrahmanyam, 2005. "Order Flow Patterns around Seasoned Equity Offerings and their Implications for Stock Price Movements," International Review of Finance, International Review of Finance Ltd., vol. 5(1‐2), pages 75-111, March.
    • Handle: RePEc:bla:irvfin:v:5:y:2005:i:1-2:p:75-111
    DOI: 10.1111/j.1468-2443.2006.00052.x
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    References listed on IDEAS

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    1. John M. Griffin & Jeffrey H. Harris & Selim Topaloglu, 2003. "Investor Behavior over the Rise and Fall of Nasdaq," Yale School of Management Working Papers ysm431, Yale School of Management.
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    Cited by:

    1. Xiaoyan Chen, 2017. "Improved corporate governance and Chinese seasoned equity offering announcement effects," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 57(2), pages 401-428, June.
    2. Hélène Rainelli-Le Montagner, 2008. "Finance d'entreprise:voix nouvelles et nouvelles voies," Revue Finance Contrôle Stratégie, revues.org, vol. 11(Special), pages 291-313, June.
    3. repec:dau:papers:123456789/4430 is not listed on IDEAS
    4. repec:dau:papers:123456789/9015 is not listed on IDEAS

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