Equity offerings, stock price crash risk, and the impact of securities regulation: international evidence

We examine whether earnings manipulation around seasoned equity offerings (SEOs) is associated with an increase in the likelihood of a stock price crash post-issue and test whether the enactment of securities regulations attenuate the relation between SEOs and crash risk. Empirical evidence documents that managerial tendency to conceal bad news increases the likelihood of a stock price crash (Jin and Myers, 2006; Hutton, Marcus, and Tehranian, 2009). We test this hypothesis using a sample of firms from 29 EU countries that enacted the Market Abuse Directive (MAD). Consistent with our hypothesis, we find that equity issuers that engage in earnings management experience a significant increase in crash risk post-SEO relative to control groups of non-issuers; this effect is stronger for equity issuers with poor information environments. In addition, our findings show a significant decline in crash risk post-issue after the enactment of MAD that is stronger for firms that actively manage earnings. This decline in post-issue crash risk is more effective in countries with high ex-ante institutional quality and enforcement. These results suggest that the implementation of MAD helps to mitigate managers’ ability to manipulate earnings around SEOs.

Earnings management and stock price crashes post-crossdelisting

We test whether cross-delisted firms from the major U.S. stock exchanges experience an increase in crash risk associated with earnings management. Consistent with our prediction, we find that earnings management have a greater positive impact on stock price crash risk post-cross-delisting when compared to a sample of still cross-listed firms. Moreover, our results suggest that this effect is more pronounced for crossdelisted firms from countries with weaker investor protection and poorer quality of their information environment. We further examine whether managers’ ability to manipulate earnings increases post-cross-delisting around seasoned equity offerings. Our evidence shows that cross-delisted firms that engage in earnings management to inflate reported earnings prior to a seasoned equity offering are more likely to observe a subsequent stock price crash.

[An editorial to] Recent Advances on Knowledge Discovery and Business Intelligence

Special issue guest editorial, June, 2015.

Synthesis, antiangiogenesis evaluation and molecular docking studies of 1-Aryl-3-[(thieno[3,2-b]pyridin-7-ylthio)phenyl]ureas: Discovery of a new substitution pattern for type II VEGFR-2 Tyr kinase inhibitors

The synthesis and biological evaluation of novel 1-aryl-3-[2-, 3- or 4-(thieno[3,2-b]pyridin-7-ylthio)phenyl]ureas 3, 4 and 5 as VEGFR-2 tyrosine kinase inhibitors, are reported. The 1-aryl-3-[3-(thieno[3,2-b]pyridin-7-ylthio)phenyl]ureas 4a-4h, with the arylurea in the meta position to the thioether, showed the lowest IC50 values in enzymatic assays (10-206 nM), the most potent compounds 4d-4h (IC50 10-28 nM) bearing hydrophobic groups (Me, F, CF3 and Cl) in the terminal phenyl ring. A convincing rationalization was achieved for the highest potent compounds 4 as type II VEGFR-2 inhibitors, based on the simultaneous presence of: (1) the thioether linker and (2) the arylurea moiety in the meta position. For compounds 4, significant inhibition of Human Umbilical Vein Endothelial Cells (HUVECs) proliferation (BrdU assay), migration (wound-healing assay) and tube formation were observed at low concentrations. These compounds have also shown to increase apoptosis using the TUNEL assay. Immunostaining for total and phosphorylated (active) VEGFR-2 was performed by Western blotting. The phosphorylation of the receptor was significantly inhibited at 1.0 and 2.5 microM for the most promising compounds. Altogether, these findings point to an antiangiogenic effect in HUVECs.

Behavior-based price discrimination in a multi-dimensional preferences market

NIPE WP 04/ 2016