Long Term Performance and Choice of SEO Method by UK Firms

Authors

  • John Capstaff,

    1. Both authors are from the Department of Accounting and Finance, University of Strathclyde, Glasgow. They wish to thank Martin Kemmitt for valuable assistance in formatting data, and for helpful comments from other members of staff at the University of Strathclyde, in particular Patrick McColgan. They would also like to thank the editors and an anonymous referee. The paper has benefited from their suggestions for improvements.
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  • Jonathan Fletcher

    Corresponding author
    1. Both authors are from the Department of Accounting and Finance, University of Strathclyde, Glasgow. They wish to thank Martin Kemmitt for valuable assistance in formatting data, and for helpful comments from other members of staff at the University of Strathclyde, in particular Patrick McColgan. They would also like to thank the editors and an anonymous referee. The paper has benefited from their suggestions for improvements.
      John Capstaff, Department of Accounting and Finance, University of Strathclyde, Glasgow G1 1XQ, UK. 
      e-mail: j.capstaff@strath.ac.uk
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John Capstaff, Department of Accounting and Finance, University of Strathclyde, Glasgow G1 1XQ, UK. 
e-mail: j.capstaff@strath.ac.uk

Abstract

Abstract:  The long term performance of firms making seasoned equity offerings (SEOs) in the UK, in an era of discretion over the choice of issue method, is shown to differ according to the chosen method across a number of different models of expected returns. The combination of prior and post-SEO performance suggests that rights offering firms are less likely to time offers to exploit overvaluation than firms using placings. When judged on a long term basis rights offering firms are not of lesser quality than firms that choose other offering methods.

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