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| Tekijä: | Lee, I. |
| Otsikko: | Do firms knowingly sell overvaluated equity? |
| Lehti: | Journal of Finance
1997 : SEP, VOL. 52:4, p. 1439-1466 |
| Asiasana: | EQUITY CAPITAL PRICING COMPANIES PERFORMANCE APPRAISAL |
| Kieli: | eng |
| Tiivistelmä: | This paper investigates the relation between top executives' trading and the long-run stock returns of seasoned equity issuing firms. Primary issuers who sell mostly newly-issued primary shares underperform their benchmarks regardless of the top executives' prior trading pattern. Top executives' trading is however associated with the stock returns of secondary issuers who sell mostly secondary shares previously held by existing shareholders. Secondary issuers don't underperform their benchmarks, on average. The results suggest that in explaining the underperformance of issuing firms, increased free cash flow problems after issue play an important role. |
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