{"title":"Market response to stock exchange listing deficiency notices: Evidence from Nasdaq","authors":"Binod Guragai","doi":"10.1016/j.adiac.2022.100616","DOIUrl":null,"url":null,"abstract":"<div><p>The Securities and Exchange Commission (SEC) requires Form 8-K filings of quantitative deficiency notices. This study examines whether investors use these 8-K filings in a way that influences their investment decisions. Using abnormal returns, I show that investors react negatively to these 8-K filings. Reactions to filings are less negative for firms with more institutional investors. I also find that firms with more analyst following experience less negative market reaction, supporting the notion that 8-K filings are more informative when the firm's information environment is poor. I further document that equity and multiple deficiency notice filings elicit more negative reactions and are also more likely to result in actual delisting compared to bid price deficiency notice filings. Together, these results help us understand investors' perceptions and delisting risks associated with quantitative deficiency notice filings.</p></div>","PeriodicalId":1,"journal":{"name":"Accounts of Chemical Research","volume":null,"pages":null},"PeriodicalIF":16.4000,"publicationDate":"2022-12-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Accounts of Chemical Research","FirstCategoryId":"1085","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0882611022000359","RegionNum":1,"RegionCategory":"化学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"CHEMISTRY, MULTIDISCIPLINARY","Score":null,"Total":0}
引用次数: 0
Abstract
The Securities and Exchange Commission (SEC) requires Form 8-K filings of quantitative deficiency notices. This study examines whether investors use these 8-K filings in a way that influences their investment decisions. Using abnormal returns, I show that investors react negatively to these 8-K filings. Reactions to filings are less negative for firms with more institutional investors. I also find that firms with more analyst following experience less negative market reaction, supporting the notion that 8-K filings are more informative when the firm's information environment is poor. I further document that equity and multiple deficiency notice filings elicit more negative reactions and are also more likely to result in actual delisting compared to bid price deficiency notice filings. Together, these results help us understand investors' perceptions and delisting risks associated with quantitative deficiency notice filings.
期刊介绍：
Accounts of Chemical Research presents short, concise and critical articles offering easy-to-read overviews of basic research and applications in all areas of chemistry and biochemistry. These short reviews focus on research from the author’s own laboratory and are designed to teach the reader about a research project. In addition, Accounts of Chemical Research publishes commentaries that give an informed opinion on a current research problem. Special Issues online are devoted to a single topic of unusual activity and significance.
Accounts of Chemical Research replaces the traditional article abstract with an article "Conspectus." These entries synopsize the research affording the reader a closer look at the content and significance of an article. Through this provision of a more detailed description of the article contents, the Conspectus enhances the article's discoverability by search engines and the exposure for the research.
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