SEASONED EQUITY OFFERINGS - Avkastningen på den svenska aktiemarknaden 2004-2016

Abstract

One of the most important tasks of any corporation is the acquirement and accumulation of capital, which can fuel future expansions, finance acquisitions and keep a burgeoning corporation from being stopped at an early stage of the business, before it can secure stability in its cash flow. Capital can be acquired in various ways and they are not all equally attractive to a company. The least attractive is known as Seasoned equity offerings, also known as an SEO. According to several studies the act of selling ownership of the company is diluting the value of all previous shares which is related to underperforming the market. This thesis investigates whether this relationship between performing an SEO and underperformance also exists on the Stockholm stock exchange, Nasdaq Stockholm, by comparing the return of market portfolios to that of matched portfolios made up of companies which have performed an SEO. The process of matching is based on the market value of the companies and the analysis also investigates the difference between three categories of companies, based on the market value. The conclusion of these comparisons is that the portfolios that have performed SEOs have indeed underperformed the market, with results that are in line with our expectations as well as earlier studies.