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Created
May 09, 2022 13:18
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Scholarly Communications and Copyright
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Added
TAR-1.pdf
May 09, 2022 13:18
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Scholarly Communications and Copyright
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Added Creator Mary E. Barth
May 09, 2022 13:18
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Scholarly Communications and Copyright
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Added Creator Kurt H. Gee
May 09, 2022 13:18
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Scholarly Communications and Copyright
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Added Creator Doron Israeli
May 09, 2022 13:18
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Scholarly Communications and Copyright
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Added Creator Ron Kasznik
May 09, 2022 13:18
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Scholarly Communications and Copyright
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Published
May 09, 2022 13:18
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Scholarly Communications and Copyright
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May 17, 2022 14:16
by
xzx1
Description
<jats:title>ABSTRACT</jats:title>
<jats:p>We investigate whether firms manage stock prices in anticipation of share issuance. Warrant exercise results in share issuance and warrant expiration dates are fixed years in advance, which precludes market timing. We predict firms manage stock prices to prevent (induce) warrant exercise when exercise is dilutive (anti-dilutive) to existing shareholders. To test our prediction, we examine stock returns around warrant expiration dates. We find that the difference between out-of-the-money (OTM) and in-the-money (ITM) firms' return patterns (i.e., post-expiration minus pre-expiration returns) is positive, and OTM (ITM) firms' return pattern is positive (negative). Return patterns of three sets of pseudo warrant firms differ from patterns of warrant firms. Return patterns are stronger when more feasible price changes are required to affect warrant expiration status, and firm-issued news items is a mechanism for price management. Thus, our findings provide evidence that firms engage in stock price management in anticipation of share issuance.</jats:p>
- <jats:title>ABSTRACT</jats:title> <jats:p>
- We investigate whether firms manage stock prices in anticipation of share issuance. Warrant exercise results in share issuance and warrant expiration dates are fixed years in advance, which precludes market timing. We predict firms manage stock prices to prevent (induce) warrant exercise when exercise is dilutive (anti-dilutive) to existing shareholders. To test our prediction, we examine stock returns around warrant expiration dates. We find that the difference between out-of-the-money (OTM) and in-the-money (ITM) firms' return patterns (i.e., post-expiration minus pre-expiration returns) is positive, and OTM (ITM) firms' return pattern is positive (negative). Return patterns of three sets of pseudo warrant firms differ from patterns of warrant firms. Return patterns are stronger when more feasible price changes are required to affect warrant expiration status, and firm-issued news items is a mechanism for price management. Thus, our findings provide evidence that firms engage in stock price management in anticipation of share issuance.</jats:p>
- <jats:p>JEL Classifications: G14; G15; G32; M41.</jats:p>
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May 17, 2022 14:16
by
xzx1
Description
<jats:title>ABSTRACT</jats:title> <jats:p>
- <jats:title>ABSTRACT</jats:title>
- We investigate whether firms manage stock prices in anticipation of share issuance. Warrant exercise results in share issuance and warrant expiration dates are fixed years in advance, which precludes market timing. We predict firms manage stock prices to prevent (induce) warrant exercise when exercise is dilutive (anti-dilutive) to existing shareholders. To test our prediction, we examine stock returns around warrant expiration dates. We find that the difference between out-of-the-money (OTM) and in-the-money (ITM) firms' return patterns (i.e., post-expiration minus pre-expiration returns) is positive, and OTM (ITM) firms' return pattern is positive (negative). Return patterns of three sets of pseudo warrant firms differ from patterns of warrant firms. Return patterns are stronger when more feasible price changes are required to affect warrant expiration status, and firm-issued news items is a mechanism for price management. Thus, our findings provide evidence that firms engage in stock price management in anticipation of share issuance.</jats:p>
- <jats:p>JEL Classifications: G14; G15; G32; M41.</jats:p>
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May 17, 2022 14:16
by
xzx1
Description
<jats:title>ABSTRACT</jats:title>
- ABSTRACT
- We investigate whether firms manage stock prices in anticipation of share issuance. Warrant exercise results in share issuance and warrant expiration dates are fixed years in advance, which precludes market timing. We predict firms manage stock prices to prevent (induce) warrant exercise when exercise is dilutive (anti-dilutive) to existing shareholders. To test our prediction, we examine stock returns around warrant expiration dates. We find that the difference between out-of-the-money (OTM) and in-the-money (ITM) firms' return patterns (i.e., post-expiration minus pre-expiration returns) is positive, and OTM (ITM) firms' return pattern is positive (negative). Return patterns of three sets of pseudo warrant firms differ from patterns of warrant firms. Return patterns are stronger when more feasible price changes are required to affect warrant expiration status, and firm-issued news items is a mechanism for price management. Thus, our findings provide evidence that firms engage in stock price management in anticipation of share issuance.</jats:p>
- <jats:p>JEL Classifications: G14; G15; G32; M41.</jats:p>
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May 17, 2022 14:18
by
xzx1
Publisher Identifier (DOI)
10.2308/tar-2017-0675
- https://doi.org/10.2308/TAR-2017-0675
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May 17, 2022 14:23
by
xzx1
Keyword
- Warrants; Market timing; Expectations management; Share issuance
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Updated
April 04, 2024 10:21
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[unknown user]