Discounting and Clustering in Seasoned Equity Offering Prices

By Simona Mola, Tim Loughran. Journal of Financial and Quantitative Analysis, 2004

237 citations recorded by the source corpus.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/53a77bbc4741c5be429a761721965c3ae147d13b

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In Accounting

1. Thomas J. Chemmanur
2. Yongtae Kim
3. Qiang Cheng
4. Xia Chen
5. Gang Hu
6. Shan He
7. Jay R. Ritter
8. Robert M. Bowen

In Finance

1. Thomas J. Chemmanur
2. Yongtae Kim
3. Qiang Cheng
4. Jay R. Ritter
5. M. Park
6. Shan He
7. Gang Hu
8. Xia Chen

Citations in the corpus

• Pricing of Seasoned Equity Offers and Earnings Management (2005, background): “SEOs are underpriced (Rock (1986), Ritter and Welch (2002), Altınkılıç and Hansen (2002), Corwin (2003)).”
• Analysts' Conflict of Interest and Biases in Earnings Forecasts (2007, unknown): “The average underwriting 7 fee for seasoned equity offerings also climbed in real terms from $2.7 million in the late 1980s to $5.3 million in the late 1990s (Mola and Loughran (2002)).”
• Managing Underwriters and the Marketing of Seasoned Equity Offerings (2010, unknown): “The logged price level (lnPRICE) is negatively related to the offer price discount, and issues with an integer offer price (INTEGER) are more discounted, perhaps because of pricing conventions and investment bank market power (Mola and Loughran (2004)).”
• Short Selling Around Seasoned Equity Offerings (2010, unknown): “Mola and Loughran (2004) and others show that SEO offer prices tend to be clustered at integers and even eighths.”
• The Role of Institutional Investors in Seasoned Equity Offerings (2009, background): “Mola and Loughran (2004) show that issues with integer offer prices are associated with a larger discount.”
• Local Underwriter Oligopolies and IPO Underpricing (2011, unknown): “Also, consistent with our theory, Mola and Loughran (2004) report that the hiring of an underwriter with a high number of all-star analysts is associated with greater underpricing of seasoned equity offerings.”
• Analyst Coverage and the Cost of Raising Equity Capital: Evidence from Underpricing of Seasoned Equity Offerings (2008, methodology): “Figure 1 shows an increasing trend in SEO underpricing, potentially due to changes in sample composition and changes in underwriter composition, e.g., more issues are underwritten by large underwriters for firms with high uncertainty (Mola and Loughran 2004).”
• Investment Banking and Securities Issuance (2003, background): “As first documented by Ritter (1991), Table 9 shows that IPOs have underperformed other firms of the same size by an average of 3.”
• Seasoned Equity Offerings: Quality of Accounting Information and Expected Flotation Costs (2009, unknown): “For SEOs, there is also a tendency to set gross spreads at integers, which accounts for 22% of the sample, consistent with the prior evidence of Mola and Loughran (2004).”
• The Marketing of Seasoned Equity Offerings (2010, unknown): “Corwin (2003), Altinkilic and Hansen (2003), and Mola and Loughran (2004) show that SEOs in the 1990s were typically underpriced by 2 - 3% relative to the closing market price on the day of issue.”