Journal of Financial Intermediation Vol. 20 No. 2 2011
Does Rule 10b-21 increase SEO discounting?
Abstract
Short sale constraints prior to seasoned equity offers, imposed by Rule 10b-21 in 1988, are believed to compromise pricing efficiency and contribute to the large temporal increase in offer price discounting. This study provides additional insights by examining shelf-registered offers, which were exempt from pre-issue short sale constraints until 2004. The results suggest that pre-issue short sale constraints do not influence the level of discounting in seasoned equity offers. Moreover, this study reports that the recent temporal increase in discounting is due to a greater prevalence of overnight shelf offers, which are associated with relatively large offer price discounts.
- DOI
- 10.1016/j.jfi.2010.08.002
- Volume
- 20
- Issue
- 2
- Pages
- 231-247
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref