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Shelf Registrations and Shareholder Wealth: A Comparison of Shelf and Traditional Equity Offerings
Author(s) -
MOORE NORMAN H.,
PETERSON DAVID R.,
PETERSON PAMELA P.
Publication year - 1986
Publication title -
the journal of finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 18.151
H-Index - 299
eISSN - 1540-6261
pISSN - 0022-1082
DOI - 10.1111/j.1540-6261.1986.tb05048.x
Subject(s) - issuer , shareholder , equity (law) , business , stock price , commission , stock (firearms) , monetary economics , finance , economics , corporate governance , geography , political science , law , paleontology , archaeology , series (stratigraphy) , biology
This study examines the effect of issuing common stock on shareholder wealth under two alternative methods of registration, shelf registration under the Securities and Exchange Commission's Rule 415 and the traditional method of registering shares for immediate sale. The stock price reactions accompanying security registrations and offerings over the period from March 1982 through November 1983 are examined for over two hundred issues. A negative price reaction is observed for traditional and shelf registrations for both utility and non‐utility issuers. No statistically significant difference is observed between shelf and traditional registrations. Further negative price reactions precede the offerings of these securities.