An Analysis of Stock Price Reaction to SEO in A-share Market and Its Factors

Increasing stock issues is one of the major ways to refinance for listed companies.Our results from the examinations of effective samples show that there is a significant negative stock price reaction to SEO in A-share market.However,after the samples have been divided into groups,such a conclusion is not firm any more.Further research indicates that,in different market situations, such as bull or bear market,there is a firm conclusion that stock price reaction to SEO is significantly different.An explanation of such a conclusion from the point of investor sentiment may be more applicable.Moreover,different ways of SEO transfer different motivational information to the market,which may lead to different stock price reactions.The reason has its particularity which may be related to the particular way of development of China's stock market and its institutional environment.