TY  - JOUR
AU  - Lyandres,Evgeny
AU  - Sun,Le
AU  - Zhang,Lu
TI  - Investment-Based Underperformance Following Seasoned Equity Offerings
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11459
PY  - 2005
Y2  - July 2005
UR  - http://www.nber.org/papers/w11459
L1  - http://www.nber.org/papers/w11459.pdf
N1  - Author contact info:
Evgeny Lyandres
Jesse H. Jones Graduate School of Management
Rice University- Mail Stop 531
P.O. Box 2932
Houston, TX 77252-2932
Tel: 713/348-4708
E-Mail: lyandres@rice.edu

Le Sun
E-Mail: lesun@simon.rochester.edu

Lu Zhang
Fisher College of Business
The Ohio State University
2100 Neil Avenue
Columbus, OH 43210
Tel: 585-267-6250
E-Mail: zhanglu@fisher.osu.edu
M2  - featured in NBER digest on 2005-07-04
AB  - Adding a return factor based on capital investment into standard, calendar-time factor regressions makes underperformance following seasoned equity offerings largely insignificant and reduces its magnitude by 37-46%. The reason is that issuers invest more than nonissuers matched on size and book-to-market. Moreover, the low-minus-high investment-to-asset factor earns a significant average return of 0.37% per month. Our evidence suggests that the underperformance results from the negative investment-expected return relation, as predicted by Carlson, Fisher, and Giammarino (2005).
ER  -