Heterogeneous effects of the SEC’s Securities Offering Reform

Danial Hemmings, Lynn Hodgkinson and Qingwei Wang

Economics Letters, 2018, vol. 170, issue C, 131-135

Abstract: The SEC’s Securities Offering Reform (SOR) was intended to address information problems prior to Seasoned Equity Offerings (SEO), thereby mitigating the problem of SEO overpricing. Consistent with the propensity of overpricing increasing with idiosyncratic stock return volatility (IVOL), we find greater capital market benefits from SOR for high IVOL issuers. Counter to concerns that SOR also enables issuers to hype their stock, we find no evidence of market conditioning following SOR, even among high IVOL issuers.

Keywords: Securities Offering Reform; Seasoned Equity Offerings; Idiosyncratic volatility; Market conditioning (search for similar items in EconPapers)
JEL-codes: G14 G32 G38 M40 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:170:y:2018:i:c:p:131-135

DOI: 10.1016/j.econlet.2018.06.013

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