We examine the disclosure of size revisions of seasoned stock offerings to see what information revisions impart to investros. Revisions could deliver firm-originated infoirmation, 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 investros and underwriters use to learn about the demand for an offering.
No takes yet. Share an insight, caveat, or question.
Galloway et al. (1998) studied this question.
Synapse has enriched 3 closely related papers on similar clinical questions. Consider them for comparative context: