Corporate Governance, Dividend Status, Ownership Structure, and the Performance of Greek Seasoned Equity Offerings

We examine the short-term and long-term share-price behaviour surrounding the announcement of seasoned equity offerings (SEOs) by firms listed on the Athens Stock Exchange (ASE). The idiosyncrasies of the ASE make for an interesting investigation of SEO announcements in relation to the effect of corporate governance mechanisms, ownership structure, and dividend-paying status. We examine changes in leverage and systematic risk, as well as the long-term share price and operating performance of those firms involved in a SEO. We report significant share-price appreciations on SEO announcement day. We find a share-price rally before the announcement of SEOs and subsequent share-price reversals. Our results suggest that corporate governance structures, dividend status, and ownership concentration enhance the information content of SEOs. Finally, we report evidence that the long-term operating performance and the capital structure of firms announcing a SEO deteriorates for up to two years following the announcement.