Does Rule 10b-21 increase SEO discounting?
Short sale constraints prior to seasoned equity offers, imposed by Rule 10b-21 in 1988, are believed to compromise pricing efficiency and contribute to the large temporal increase in offer price discounting. This study provides additional insights by examining shelf-registered offers, which were exempt from pre-issue short sale constraints until 2004. The results suggest that pre-issue short sale constraints do not influence the level of discounting in seasoned equity offers. Moreover, this study reports that the recent temporal increase in discounting is due to a greater prevalence of overnight shelf offers, which are associated with relatively large offer price discounts.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fama, Eugene F. & French, Kenneth R., 2001.
"Disappearing dividends: changing firm characteristics or lower propensity to pay?,"
Journal of Financial Economics,
Elsevier, vol. 60(1), pages 3-43, April.
- Eugene F. Fama & Kenneth R. French, 2001. "Disappearing Dividends: Changing Firm Characteristics Or Lower Propensity To Pay?," Journal of Applied Corporate Finance, Morgan Stanley, vol. 14(1), pages 67-79.
- Eugene F. Fama & Kenneth R. French, . "Disappearing Dividends: Changing Firm Characteristics or Lower Propensity to Pay?."," CRSP working papers 509, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Marianne Bertrand & Sendhil Mullainathan, 2003.
"Enjoying the Quiet Life? Corporate Governance and Managerial Preferences,"
Journal of Political Economy,
University of Chicago Press, vol. 111(5), pages 1043-1075, October.
- Bertrand, Marianne & Mullainathan, Sendhil, 2003. "Enjoying the Quiet Life? Corporate Governance and Managerial Preferences," Scholarly Articles 3429713, Harvard University Department of Economics.
- Wayne E. Ferson & Sergei Sarkissian & Timothy T. Simin, 2003.
"Spurious Regressions in Financial Economics?,"
Journal of Finance,
American Finance Association, vol. 58(4), pages 1393-1414, 08.
- Loderer, Claudio F. & Sheehan, Dennis P. & Kadlec, Gregory B., 1991. "The pricing of equity offerings," Journal of Financial Economics, Elsevier, vol. 29(1), pages 35-57, March.
- White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
- Bernardo Bortolotti & William Megginson & Scott B. Smart, 2008.
"The Rise of Accelerated Seasoned Equity Underwritings,"
Journal of Applied Corporate Finance,
Morgan Stanley, vol. 20(3), pages 35-57.
- William L. Megginson & Bernardo Bortolotti & Scott B. Smart, 2007. "The Rise of Accelerated Seasoned Equity Underwritings," Working Papers 2007.5, Fondazione Eni Enrico Mattei.
- Altinkilic, Oya & Hansen, Robert S., 2003. "Discounting and underpricing in seasoned equity offers," Journal of Financial Economics, Elsevier, vol. 69(2), pages 285-323, August.
- David J. Denis, 1993. "The Costs Of Equity Issues Since Rule 415: A Closer Look," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 16(1), pages 77-88, 03.
- Kenneth A. Kim & Hyun-Han Shin, 2004. "The Puzzling Increase in the Underpricing of Seasoned Equity Offerings," The Financial Review, Eastern Finance Association, vol. 39(3), pages 343-365, 08.
- Mola, Simona & Loughran, Tim, 2004. "Discounting and Clustering in Seasoned Equity Offering Prices," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 39(01), pages 1-23, March.
- Shane A. Corwin, 2003. "The Determinants of Underpricing for Seasoned Equity Offers," Journal of Finance, American Finance Association, vol. 58(5), pages 2249-2279, October.
- Gerard, Bruno & Nanda, Vikram, 1993. " Trading and Manipulation around Seasoned Equity Offerings," Journal of Finance, American Finance Association, vol. 48(1), pages 213-45, March.
- Denis, David J, 1991. "Shelf Registration and the Market for Seasoned Equity Offerings," The Journal of Business, University of Chicago Press, vol. 64(2), pages 189-212, April.
- Granger, C. W. J. & Newbold, P., 1974. "Spurious regressions in econometrics," Journal of Econometrics, Elsevier, vol. 2(2), pages 111-120, July.
- Tim Loughran & Jay Ritter, 2004. "Why Has IPO Underpricing Changed Over Time?," Financial Management, Financial Management Association, vol. 33(3), Fall.
- Autore, Don M. & Kumar, Raman & Shome, Dilip K., 2008. "The revival of shelf-registered corporate equity offerings," Journal of Corporate Finance, Elsevier, vol. 14(1), pages 32-50, February.
- Rock, Kevin, 1986. "Why new issues are underpriced," Journal of Financial Economics, Elsevier, vol. 15(1-2), pages 187-212.
- Chemmanur, Thomas J. & He, Shan & Hu, Gang, 2009. "The role of institutional investors in seasoned equity offerings," Journal of Financial Economics, Elsevier, vol. 94(3), pages 384-411, December.
- Lease, Ronald C & Masulis, Ronald W & Page, John R, 1991. " An Investigation of Market Microstructure Impacts on Event Study Returns," Journal of Finance, American Finance Association, vol. 46(4), pages 1523-36, September.
When requesting a correction, please mention this item's handle: RePEc:eee:jfinin:v:20:y:2011:i:2:p:231-247. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.