Valuation effects of domestic and international seasoned equity offerings by Canadian cross-listed firms

Abstract

This paper finds significant differences in the price impacts around the announcement date for domestic and international seasoned equity offerings (SEOs) by Canadian issuers cross-listed on US trade venues. Important determinants that differ by US cross-listing trade venue are identified for the price impacts associated with domestic and international SEOs. The significant determinants are variables that proxy for positive private and public firm information for the domestic SEOs of issuers cross-listed on NASDAQ, and are mainly variables that proxy for negative private information for the domestic SEOs of issuers cross-listed on the NYSE/AMEX. Good and bad news affect domestic and international SEOs favorably and unfavorably, respectively. The only common determinant for the domestic and international SEOs and for domestic SEOs for both groupings of US listing venues is whether or not the issue is primary.