Differences in the information environment prior to seasoned equity offerings under relaxed disclosure regulation

• 成果类型: Article
• 署名作者: Clinton, Sarah B.; White, Joshua T.; Woidtke, Tracie
• 署名单位: University of Tennessee System; University of Tennessee Knoxville; University System of Georgia; University of Georgia; University of Tennessee System; University of Tennessee Knoxville
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2014.05.002
• 发表日期: 2014
• 关键词: association; LITIGATION; cost

摘要

The SEC promulgated the Securities Offering Reform (SOR) in 2005 to ease disclosure restrictions prior to seasoned equity offerings (SEOs). The SEC argued that SOR would improve the information environment, but critics claimed it would allow firms to hype their stock. This paper is the first to examine the information environment at the time of capital formation under SOR. We find more frequent and accurate management earnings forecasts, more 8-K filings, greater absolute market-adjusted returns, and more positive stock returns leading up to the SEO issue date indicating a richer pre-SEO information environment with capital formation benefits after SOR. (C) 2014 Elsevier B.V. All rights reserved.