Title: Equities issues and long-term firm's performances in Tunisian stock market

Authors: Hatem Mansali; Wissem Daadaa

Addresses: IRG, Université Paris-Est, France and LIFE, Université de Tunis El Manar. FSEG de Nabeul, Campus Universitaire Mrezga, Route Hammamet, 8000, Nabeul, Tunisia ' LIFE, Université de Tunis El Manar, Tunisia

Abstract: This paper investigates the long-run performance of seasoned equity offering (SEO) firms in Tunisia. We use event time and calendar time approach to measure the long-run performance of SEO firms. The results suggest that SEO firms underperform in the long-run, and this underperformance is robust according to alternative measures. In the cross-section, we show that the runup, market runup and the proceeds from SEO are significant determinants of the underperformance of SEO firms. These results are in accordance with both behavioural theories and real options theory. To distinguish between these two theories, we analyse the average systematic risk dynamics around SEO. The results suggest that there is an increase in risk before the offering, and a significant decrease of risk after the offering. The behaviour of risk around SEO appears consistent with real options predictions.

Keywords: SEO; seasoned equity offering; real options; long-run performance; timing.

DOI: 10.1504/IJMFA.2018.091074

International Journal of Managerial and Financial Accounting, 2018 Vol.10 No.1, pp.32 - 47

Received: 08 Jun 2017
Accepted: 26 Nov 2017
Published online: 09 Apr 2018 *

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