| dc.description.abstract | This study examines whether the issuance of convertible bonds by listed and over-the-counter companies in Taiwan′s network communication industry from 2017 to 2023 resulted in abnormal stock returns. The research focuses not only on the traditional announcement date but also considers the impact of the actual issuance date and conversion date on stock prices, with a total of 17 samples. This study employs the event study methodology, using an analysis window of -20 to +20 days to evaluate the effect of these three event dates on the average abnormal return (AR) and cumulative abnormal return (CAR) of stock prices.
Empirical findings show that the announcement of issuing convertible bonds has a significant positive impact on stock prices before and after the event, particularly eight days before the announcement, where there is a clear upward trend in stock prices. This reflects the market′s positive expectations for the network communication industry, possibly due to early leaks of information, leading insiders or major shareholders to act in advance and push up stock prices.
On the actual issuance date of the convertible bonds, although stock prices initially maintained a positive trend, they turned downward after the issuance, indicating the market′s negative sentiment following the event. This reflects concerns about equity dilution or insiders locking in profits through asset swap transactions, which negatively impacted stock prices.
On the conversion date of the convertible bonds, changes in stock prices were not significant before and after the event. However, after the conversion date, stock prices began to decline significantly, indicating the market′s evident concern about equity dilution and the selling pressure from the conversion of stocks. | en_US |