This study examines the long-run performance and risk changes for a sample of 901 firms with 1100 announcements of private placement of equity. Those firms experience positive prior three years stock price returns and negative post three years stock price returns. Specifically, this study shows the downstream of the equity risk surrounding the placements. The decline in equity risk suggests that the stock price does not underperform after the private placement of equity. Moreover, the study also generates some more findings such as the decline in asset risk and the increase in financial risk. These findings demonstrate that the firms that sell equity through private placement convey information about the underlying riskiness of firms’ assets and convey information about capital expenditure.

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