Heterogeneous effects of the SEC's Securities Offering Reform

Research output: Contribution to journalArticle

Electronic versions


  • 2018_Heterogeneous_effects_of_the_SEC_s_Securities_Offering_Reform

    Accepted author manuscript, 439 KB, PDF-document

    Embargo ends: 1/05/99


We examine whether the capital market benefits of the SEC’s Securities Offering Reform (SOR) depend on issuers’ prevailing levels of idiosyncratic stock return volatility (IVOL). SOR is intended to address information problems prior to Seasoned Equity Offerings (SEO) by affording greater discretion over pre-SEO disclosures, thereby mitigating the problem of SEO overpricing. Consistent with the propensity of overpricing increasing with IVOL, we find that the capital market benefits of SOR are greater for high IVOL issuers. Counter to concerns that SOR may also enable issuers to hype their stock prior to the SEO, we find no evidence of such market conditioning following SOR, even among high IVOL issuers.
Original languageEnglish
Pages (from-to)131-135
JournalEconomics Letters
Early online date18 Jun 2018
Publication statusPublished - 1 Sep 2018
View graph of relations