What Does the Market Learn from Stock Offering Revisions?

Financial Management Vol. 27 No. 1, Spring 1998

Posted: 15 Jun 1998

See all articles by Tina M. Galloway

Tina M. Galloway

University of Miami - Department of Finance

Claudio F. Loderer

University of Berne - Institute for Financial Management; European Corporate Governance Institute (ECGI)

Dennis P. Sheehan

Pennsylvania State University

Abstract

We examine the disclosure of size revisions of seasoned stock offerings to see what information revisions impart to investors. Revisions could deliver firm-originated information, which discloses something managers know about the firm. Alternatively, they could disseminate market-originated information, which is information market participants have but which is not conveyed until trading takes place. Our results reject the notion that revisions reveal firm-originated news. Instead, the results are consistent with the market-originated news hypothesis and suggest a mechanism that investors and underwriters use to learn about the demand for an offering.

JEL Classification: G12, G14

Suggested Citation

Galloway, Tina M. and Loderer, Claudio F. and Sheehan, Dennis P., What Does the Market Learn from Stock Offering Revisions?. Financial Management Vol. 27 No. 1, Spring 1998, Available at SSRN: https://ssrn.com/abstract=94968

Tina M. Galloway (Contact Author)

University of Miami - Department of Finance ( email )

P.O. Box 248094
Coral Gables, FL 33124-6552
United States
305-284-1883 (Phone)
305-284-4800 (Fax)

Claudio F. Loderer

University of Berne - Institute for Financial Management ( email )

Engehaldenstrasse 4
Bern, CH-3012
Switzerland
+41 31 631 37 75 (Phone)
+41 31 631 84 21 (Fax)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Dennis P. Sheehan

Pennsylvania State University ( email )

Smeal College of Business
University Park, PA 16802
United States
814-863-8512 (Phone)
814-865-3362 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Abstract Views
1,220
PlumX Metrics