The pricing of equity offerings

Claudio F. Loderer; Dennis P. Sheehan; Gregory B. Kadlec

doi:10.1016/0304-405X(91)90012-9

The pricing of equity offerings

Claudio F. Loderer, Dennis P. Sheehan, Gregory B. Kadlec

Finance

Research output: Contribution to journal › Article › peer-review

72 Scopus citations

Abstract

Examination of 1,600 seasoned equity offerings reveals little evidence that underwriters systematically set offer prices below the market price on the major exchanges, though they may do so for NASDAQ issues. Quick round-trip transactions in seasoned offerings are not profitable, but subscribing to an offering and holding the stock for 30 days seems to be very profitable, especially in the NASDAQ market. In addition to seasoned offerings, we analyze 250 issues of new classes of preferred stock. These issues are not underpriced.

Original language	English (US)
Pages (from-to)	35-57
Number of pages	23
Journal	Journal of Financial Economics
Volume	29
Issue number	1
DOIs	https://doi.org/10.1016/0304-405X(91)90012-9
State	Published - Mar 1991

All Science Journal Classification (ASJC) codes

Accounting
Finance
Economics and Econometrics
Strategy and Management

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10.1016/0304-405X(91)90012-9

Cite this

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The pricing of equity offerings

Abstract

All Science Journal Classification (ASJC) codes

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