Media Connections and Seasoned Equity Offerings
Presentation
Overview
Overview
Description
We present the evidence that media connections are associated with a greater SEO likelihood, more negative announcement returns, and poorer long-term performance. We also find the effect of media connections on announcement returns is more pronounced for firms with higher information asymmetry and greater financial constraints. Further, media connections are positively associated with issuer media coverage and sentiment prior to the SEO announcement. Overall, our findings are consistent with the information manipulation hypothesis, which contends that SEO issuers use their connections to media firms as a strategic tool to manipulate soft information and successfully issue overvalued equity.[D1] [D1]I think we need to have an abstract no more than 100 words, as the majority of journals require that.
