Download or read book Valuation, Earnings Management and the Underperformance of Loss Seasoned Equity Offerings written by Fernando Comiran and published by . This book was released on 2018 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: The current literature on earnings management around seasoned equity offerings (SEOs) mainly concentrates on discretionary accruals, and considers all SEOs as a homogenous pool of firms. The uniqueness of this paper is in linking firms' valuation to their discretionary choices and by demonstrating that loss firms do not manage earnings during SEOs as earnings are not informative for their valuation. We find that loss firms overinvest in R&D around SEOs, because R&D expenditures are the main value-driver for loss SEOs. We further show that overinvestment in R&D is negatively associated with future operating performance for loss firms.