NEW ECONOMY SEASONED EQUITY OFFERS IN AUSTRALIA

Abstract

This study examines the announcement period returns of seasoned equity offers (SEOs) by new economy companies in Australia between 1994 and 2004 in the form of private placements and rights offers. The effects of variables constructed from publicly available information on the announcement period returns of new economy seasoned equity offers are examined. New economy SEOs are preceded by substantial share price run-ups in the period before the offer announcement. We find that publicly available information about the new economy SEOs can explain offer price discounts and excess returns before the seasoned equity offer' announcements. JEL classification: G12, G14, G19 Keywords: SEO announcement time returns; New economy