Long-run performance and insider trading in completed and canceled seasoned equity offerings

Jonathan Clarke, Craig Dunbar, Kathleen M. Kahle

Research output: Contribution to journalArticle

66 Scopus citations


This paper provides evidence on managerial motives for raising equity by examining long-run performance and insider trading around canceled and completed seasoned equity offerings (SEOs). Insider selling increases prior to completed and canceled SEOs, but declines afterward only for canceled offerings. For completed SEOs, pre-filing insider trading is related to long-run performance after completion. For canceled SEOs, pre-filing insider trading is related to stock performance between filing and cancellation. Finally, changes in insider trading around SEO filing affect the probability of cancellation. Overall, the evidence is consistent with insiders exploiting windows of opportunity by attempting to issue overvalued equity and by canceling the issue when the market reaction to the announcement eliminates the overvaluation.

Original languageEnglish (US)
Pages (from-to)415-430
Number of pages16
JournalJournal of Financial and Quantitative Analysis
Issue number4
StatePublished - Dec 2001
Externally publishedYes


ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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