Are private placements associated with more active media management than public offerings? Evidence from Taiwan
研究了台湾企业私募配售与公开发行期间的媒体活动，发现私募配售企业有更多正面新闻和更少负面新闻，且发行后媒体管理更活跃，可能旨在影响股价以利于内部人。
Purpose This study investigates the media activities of firms issuing private equity placements and seasoned equity offerings in Taiwan, as firms have incentives to manage media coverage to influence their stock prices during private equity placement. Design/methodology/approach We collect a corpus of news stories and transform the news into term sets based on the part of speech. Then, we refer to Cecchini et al . (2010) to classify the news terms into positive, negative, and usual categories. Next, we employ the SVM algorithm to perform the classification tasks and the term frequency method to perform the text mining task. In last, we use a multiple regression model to verify the hypotheses. Findings We determine that issuing firms in a private placement have substantially more positive news stories and fewer negative news stories than those in public offerings. Furthermore, we evidence that the media management effects of postequity issues are more active than those of preequity issues. Finally, our results demonstrate that the timing and content of financial media coverage among different equity issuance methods may be biased by firm management. According to previous studies, they may attempt to manipulate stock prices to increase the number of highly profitable insider stakeholders. Originality/value To our knowledge, this is the first study to investigate that if private placement will associate with more active media management than the public offerings. According to our results of the difference-in-means test, the public offerings market may control news coverage; however, this result is inconsistent with that of the regression results. The private placements market may also exercise media management in the “before announcement day” and “after announcement day” periods by increasing positive news and reducing negative news.