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Influence of Secondary Offerings on the Liquidity and Trading Activity of Stocks Outstanding

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This paper examines the influence of secondary offerings (SOs) on the liquidity and trading activity of stocks outstanding. The results reveal that liquidity and trading activity increase after the execution of SOs. We observe that the offering discount is explained by the size of the offering and its retail composition. We have also shown that changes in liquidity and trading activity are explained by the retail composition of the offering, such that the choice of ownership structure is decisive in the level of liquidity afforded by SOs. The offering discount is one of the chosen methods of attracting small-scale investors and promoting share liquidity following these operations.

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  • Miguel A. Acedo & Fco. Javier Ruiz & Rafael Santamaría, 2008. "Influence of Secondary Offerings on the Liquidity and Trading Activity of Stocks Outstanding," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 58(01-02), pages 21-37, January.
    • Handle: RePEc:fau:fauart:v:58:y:2008:i:1-2:p:21-37
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    Cited by:

    1. Camilleri, Silvio John & Galea, Francelle, 2019. "The Determinants of Securities Trading Activity: Evidence from four European Equity Markets," MPRA Paper 95298, University Library of Munich, Germany.

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    More about this item

    Keywords

    secondary offerings (SOs); liquidity; trading activity; microstructure; capital structure;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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