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Evidence of Selling by Managers after Seasoned Equity Offering Announcements
Journal article   Peer reviewed

Evidence of Selling by Managers after Seasoned Equity Offering Announcements

Michael Gombola, Hei Lee and Feng-Ying Liu
Financial management, v 26(3), pp 37-53
01 Oct 1997

Abstract

Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill (G32) Information and Market Efficiency, Event Studies, Insider Trading (G14) Northern America Personnel Management, Executives, Executive Compensation (M12) U.S
This paper documents concentrated net selling by managers in the month immediately following the announcement of seasoned equity offerings, together with continued substantial net selling for several additional months. This suggests that insiders may delay a significant amount of trading to avoid legal and market penalties. Significant abnormal insider net selling is evident both before and after passage of the Insider Trading Sanctions Act of 1984. We also find more post-announcement abnormal insider selling for growth firms than for mature firms, which is consistent with a greater degree of overpricing for growth firms than mature firms.

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Collaboration types
Domestic collaboration
Web of Science research areas
Business, Finance
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