Publication:
Can existing corporate finance theories explain security offerings during the COVID-19 pandemic?, with Marie Dutordoir, Joshua Shemesh, and Chris Veld, 2024, Journal of Empirical Finance, 79, 101158
Working papers:
The Spillover Effects of Textual Disclosures for Seasoned Equity Issuance Decisions (Job Market Paper)
Abstract: This paper examines how the Management Discussion and Analysis (MD&A) narratives of peer firms influence a firm’s decision to issue equity. Utilizing FinBERT for sentiment analysis, I find that firms are more likely to issue equity when the tone of peers’ MD&A becomes more positive. This spillover effect is particularly pronounced for firms facing less product market competition or those acting as market followers. Notably, firms that actively access peer 10-K filings are the primary drivers of this effect. The spillover is largely influenced by changes in the tone of non-numerical sentences and forward-looking statements.
Investor base, short selling, and announcement returns: Evidence from the convertible bond market
Abstract: This paper investigates the impact of shifts in the investor base on convertible bond announcement returns from April 1986 to June 2021. Over the past decades, the convertible bond market has witnessed two significant shifts in its investor base from traditional long-only investors to convertible arbitrage hedge funds since 2000 and then back to traditional long-only investors after the GFC. Compared with the period when the traditional long-only investors were the primary buyers of convertible bonds, I document a significantly more negative convertible bond announcement effect when convertible arbitrage hedge funds dominated the market. Moreover, this difference disappears after controlling for arbitrage-induced short-selling. I also observe a price reversal for the convertible bonds announced when convertible arbitrage hedge funds dominated the market.