If you want a bargain, avoid long sun exposure….

Maybe some things are better off done away from daylight.  Sun and colleagues report that “We examine sunshine-induced mood and its impacts on investors’ bidding decisions in the primary market where seasoned equities are offered. . . . . We find that investors exposed to stronger sunshine intensity or longer sunshine duration submit a higher bid price for SEOs [seasoned equity offerings], thus leading to lower offer discounts. We also find that mood misattribution and risk-taking act as channels to rationalize such a sunshine effect. Our moderating analyses indicate that the documented impact strengthens in the case of greater uncertainty, less-frequent bidders, retail investors, and lower levels of investment. These sunshine effects impact failed bids, SEO participation and SEOs’ long-term performance. Our study provides original evidence that investors in the primary market can be influenced by a sunshine-induced mood, which, in turn, determines the cost of equity financing.”

Qian Sun, Xiaoke Cheng, Shenghao Gao, Tao Chen, and Jia Liu.  2023. “Sunshine-Induced Mood and SEO Pricing:  Evidence from Detailed Investor Bids in SEO Auctions.”  Journal of Corporate Finance, vol. 80, 102411, https://doi.org/10.1016/j.jcorfin.2023.102411