Using hedge funds' holdings of IPO stocks, we find that stocks with abnormally high hedge fund holdings, based on stock and deal characteristics, yield abnormal returns. Moreover, hedge funds are able to sell IPO stocks in a timely fashion before long-run underperforming periods start,...

Seasoned equity issuers file Forms S and 424B with the Securities and Exchange Commission. We find that weak-modal tones of these filings are positively related to offer price discounts and negatively related to offer-day stock returns. Increases in cautionary tones from the initial S filing to...