Corporate Decisions, Information and Prices: Do Managers Move Prices or Do Prices Move Managers&quest

Ronald Giammarino, Robert Heinkel, Burton Hollifield () and Kai Li

Economic Notes, 2004, vol. 33, issue 1, pages 83-110

Abstract: Seasoned equity offerings involve two significant events: registration followed by the decision to complete the issue or withdraw the registration. We present an empirical analysis of the interaction between seasoned equity issues, insider trading and the incorporation of information in prices around these two events. We find that the manager moves prices through corporate decisions but not personal ones. Specifically, the market reacts to the registration and the registration triggers information acquisition by the market, which is shown to influence the manager's final decision. Trading by managers during this interval does not, however, move prices. Copyright Banca Monte dei Paschi di Siena SpA, 2004

Date: 2004

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