A study on the private offering announcements of TSEC-kisted and GreTai-listed companies

• Main Authors: Chang Fu, 張富杰
• Other Authors: Chung-Jen Yang
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/7fy246

碩士 === 銘傳大學 === 財務金融學系碩士在職專班 === 96 === Private placements have been massively popular over the recent years in the capital markets. Private placements are the invitation for investments from publicly issued companies to specific individuals or institutions in accordance with Securities Exchange Act by issuing marketable securities. The advantages are few limitations and high flexibility. Generally speaking, when companies listed on the OTC and Taiwan Stock Exchange are conducting cash injections via private placements, investors’ perception of the future value of the companies will be influenced. As a result, there are abnormal returns to the share prices in the market. Meanwhile, as private placements are targeted to specific individuals and institutions, the issuing price will be a message that the companies convey to the market in terms of their enterprise values. This paper refers to the date of approval from shareholders’ meetings and the actual date of private placements as the event basis dates and aims to examine the abnormal returns and announcement effects of private placements. The empirical findings are as follows: 1. The significant abnormal returns of private placements prove that there are announcement effects. The signals occur fast but the response is latent. 2. The announcement effects are subject to the influence of the discount/premium of the issuing prices at the private placements. In other words, the higher the issuing price, the higher the abnormal returns. 3. Regardless whether the market is bullish or bearish, abnormal returns exist for the cash injections via private placements. According to the empirical finding and analysis, the conclusion of this paper can serve as a reference for investors to predict the changes of share prices and determine their investment strategies in the future. Companies can also refer to the conclusion to evaluate the potential impact to the company if they issue new shares via private placements.