Investor Demand for Information in Newly Issued Securities

52 Pages Posted: 15 Jan 2014 Last revised: 14 Jul 2018

See all articles by Scott W. Bauguess

Scott W. Bauguess

University of Texas at Austin - Department of Finance

John Cooney

Texas Tech University - Rawls College of Business

Kathleen Weiss Hanley

Lehigh University - College of Business

Date Written: June 28, 2018

Abstract

Using search traffic on the EDGAR system of the Securities and Exchange Commission (SEC), we examine investor demand for information and its impact on security prices. Focusing on the registration period for IPOs when information asymmetry between investors and the issuing firm is likely to be high, we document that viewership of peer firm filings significantly increases on IPO filing dates. We find that investor demand for information is positively related to the probability of IPO success, and predicts both price revisions and initial returns. Our results indicate that information acquisition is reflected in the pricing of newly issued securities.

Keywords: IPOs, bookbuilding, EDGAR, disclosure, underpricing, search traffic, information acquisition

JEL Classification: D82, D83, G14

Suggested Citation

Bauguess, Scott W. and Cooney, John W. and Hanley, Kathleen Weiss, Investor Demand for Information in Newly Issued Securities (June 28, 2018). Available at SSRN: https://ssrn.com/abstract=2379056 or http://dx.doi.org/10.2139/ssrn.2379056

Scott W. Bauguess

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States

John W. Cooney

Texas Tech University - Rawls College of Business ( email )

Lubbock, TX 79409
United States
806-834-1536 (Phone)

Kathleen Weiss Hanley (Contact Author)

Lehigh University - College of Business ( email )

Bethlehem, PA 18015
United States

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