Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments 2004 erstellt
Description:
We investigate if the long-run underperformance in the year after the SEO is related to behavioural biases that led investors to adjust their pre-issue over optimism slowly. We also examine the existence of arbitrage costs that preclude mispricing from being corrected rapidly by sophisticated investors who act as arbitrageurs. Our findings support the contention that small SEO firms are overpriced at the time of the issue and imply that their post-underperformance is related to arbitrage costs, where transaction costs play an important role although holding costs do not