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Influence of media coverage and sentiment on seasoned equity offerings
Author(s) -
Sun Ji,
Zhou Yi,
Wang Jiaguo George,
Guo Jie Michael
Publication year - 2020
Publication title -
accounting and finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.645
H-Index - 49
eISSN - 1467-629X
pISSN - 0810-5391
DOI - 10.1111/acfi.12334
Subject(s) - pessimism , equity (law) , business , stock price , advertising , media coverage , financial economics , monetary economics , economics , political science , philosophy , epistemology , sociology , law , media studies , paleontology , series (stratigraphy) , biology
This article examines the role of media in seasoned equity offerings ( SEO s) price and market reactions on SEO announcements. Using a sample of SEO deals in UK , we find that media coverage is significantly and negatively related to SEO price discounts and market returns around SEO announcements. Moreover, we document that more pessimistic media sentiment predicts larger SEO price discounts and more negative market reactions to SEO announcements. In summary, both media coverage and media sentiment influence investor decisions in SEO s, but through different mechanisms.