The earnings management, market condition and abnormal stock return of seasoned equity offerings

• Main Authors: Liang, Huiyu, 梁惠玉
• Other Authors: Chiang, Suejane
• Format: Others
• Language: zh-TW
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/40932495250893804497

碩士 === 輔仁大學 === 企業管理學系管理學碩士班 === 99 === This study examines the relationship between earning management and market reaction to its stock price performance of Seasoned Equity Offerings：announcement effect, under-pricing, initial return and long-term performance. Generally, the investors treat the SEOs as an opportunity to purchase the stock with the price well below the market and profit on the price difference. Most of the investors participate in the SEOs with the hope that they would win the draw. The decision as to when the investor should sell their SEOs would depend on the short-term, mid-term and the long-term performance of the stock price. The investor should also investigate on the long-term and short-tem performance of the company, for which the management would window dress their financial reports. This paper investigates the links between earnings management and market conditions in Taiwan using a unique sample of 463 SEOs between the period of 1996-2010. First, we found the announcement effect to be negative; under-pricing and positive relation between SEOs. Second, we found a significant negative relation between the earnings management and long-term performance. Third, we found the long-term performance of SEOs issued during the hot markets is worse than the ones issued during the cold markets.