Institutional Holdings and Seasoned Equity Offerings

2008 ◽  
Author(s):  
Huasheng Gao ◽  
Hamed Mahmudi
Keyword(s):  
Seasoned Equity Offerings ◽  
Equity Offerings ◽  
Institutional Holdings

scholarly journals Insider Trading and Institutional Holdings in Seasoned Equity Offerings

2018 ◽  
Vol 11 (3) ◽  
pp. 53 ◽  
Author(s):  
Ching-Chih Wu ◽  
Tung-Hsiao Yang
Keyword(s):  
Insider Trading ◽  
Institutional Investors ◽  
Explanatory Power ◽  
Spillover Effects ◽  
Seasoned Equity Offerings ◽  
Trading Behavior ◽  
Equity Offerings ◽  
Institutional Holdings ◽  
Insider Trades ◽  
The Impact

We investigate three issues about the impact of insider trades and institutional holdings on seasoned equity offerings (SEOs). First, we test how insider trades affect the trading behavior of institutional investors in SEOs. Second, we test whose trading behavior, either insiders or institutional investors, has greater explanatory power for the performance of SEO firms after issuing new stocks. Third, we analyze the industry-wide spillover effects of insider trades and institutional holdings. Empirically, we find that insiders and institutional investors of SEO firms may utilize similar information in their transactions because insider trades induce similar trading behavior for institutional investors. In addition, insider trades, relative to institutional holdings, have greater explanatory power for SEO firm’s long-term performance. Finally, compared with insider trades, institutional holdings have a more significant spillover effect in the industry of SEO firms.

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