Nearly 40% of IPO firms redact information from their SEC registration filings. These firms exhibit characteristics consistent with the need to shield proprietary information from potential rivals. They experience greater underpricing, but pre-IPO insiders reduce underpricing-related wealth...

Using seasoned equity offerings (SEOs) from 1989 to 2008, we examine the role of accounting conservatism in the equity market. We find that issuers with a greater degree of conservatism experience less negative market reactions to SEO announcements. We further show that an important mechanism...

Cash proceeds from employees' exercise of options are substantial, totaling over $1 trillion in aggregate since 1985. Option exercises are unlikely to inform us about how contemporaneous conditions influence managers' motives to issue, because the option grant is jointly a compensation decision,...

The controlling shareholder of a firm may suffer from its control of the firm due to unfavorable market reactions associated with concerns on his private benefit extraction. Thus, the controlling shareholder has an incentive to build a good governance mechanism as a commitment device to...

SEBI, the Indian securities market regulator has set a unique example for the entire world by introducing IPO grading in India. The purpose of this grading was to provide retail investors with a ready-made assessment of the fundamental quality of the issuer of an IPO, so they could make a better...

This study examines the association between real earnings management, governance attributes, and IPO failure risk. Using a sample of 4174 IPOs firms that went public over the period of 1998-2011, we find evidence that real earnings management and governance attributes are associated with IPO...

We investigate rights issues and open offers in Hong Kong. We observe that the greater the severity of firms' management-agency problems, the more unfavourably shareholders tend to react, leading to more negative cumulative abnormal returns or rights forfeiture. Controlling shareholders do not...

This paper provides an empirical link between the expected cost of equity and firms' Seasoned Equity Offerings activities, using a novel measure of forward-looking cost of equity. There is a negative impact of expected cost equity on SEO likelihood and amount of proceeds, exists on both market...

We investigate the effect of the “7% solution”—the fact that underwriters in the U.S. charge a 7% spread to most IPOs between $20 million and $100 million in size—on the ensuing pricing of the offerings. Our identification exploits the variation in spreads that is due to distinct kinks...

This paper employs quiet-period media tone as a proxy for investor sentiment in the IPO market and investigates its impact on primary-market demand and on short and long-run IPO performance. Using a sample of 1,068 book-built IPOs, it finds that pre-IPO quiet period media pessimism lowers...