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Tough times for seasoned equity offerings: performance during the COVID pandemic

Author

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  • Marc Zenzius

    (Technische Universität Darmstadt)

  • Christian Flore

    (Technische Universität Darmstadt)

  • Dirk Schiereck

    (Technische Universität Darmstadt)

Abstract

This study analyzes the wealth effects of SEO announcements in the US during the COVID-19 pandemic and its main determinants. We find significantly negative abnormal returns of − 8.6%. This provides persuasive evidence that capital markets reacted particularly negative during this period, reflecting higher degrees of uncertainty. We furthermore find that larger firms experience a better SEO performance and that COVID-19 related biotech & healthcare firms react particularly negative. This effect is more negative the lower the company valuation beforehand.

Suggested Citation

  • Marc Zenzius & Christian Flore & Dirk Schiereck, 2022. "Tough times for seasoned equity offerings: performance during the COVID pandemic," Journal of Business Economics, Springer, vol. 92(9), pages 1491-1510, November.
    • Handle: RePEc:spr:jbecon:v:92:y:2022:i:9:d:10.1007_s11573-022-01089-6
    DOI: 10.1007/s11573-022-01089-6
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    Cited by:

    1. Wolfgang Breuer & Andreas Pfingsten, 2022. "Non-standard issues in business finance: an overview," Journal of Business Economics, Springer, vol. 92(9), pages 1417-1430, November.

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    More about this item

    Keywords

    Covid; SEO; Event study;
    All these keywords.

    JEL classification:

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

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