AbstractThis study examines share price behavior when firms alter the size of their primary common stock offerings subsequent to the announcement date. The empirical evidence supports the theory that, given asymmetric information between management and investors, equity issuance is a function of prior stock returns. Average prediction errors in the announcement and postannouncement intervals, taken together or separately, have relative magnitudes that may be logically related to subsequent management decisions concerning these issues. Logistic regressions document significant relationships between the announcement and postannouncement excess returns and managerial decisions.