SEC order cites Professor Patrick Corrigan's paper on IPO pricing

Author: Notre Dame Law School

Patrick Corrigan

A final order by the Securities and Exchange Commission cited to Professor Patrick Corrigan's article, "The Seller's Curse and the Underwriter's Pricing Pivot: A Behavioral Theory of IPO Pricing."

The Securities and Exchange Commission's final order approved a change to the New York Stock Exchange's rules that permits companies to sell primary securities in a direct listing. Under the new rule, issuers are permitted, under certain conditions, to list their securities on the New York Stock Exchange and to sell their securities in a registered offering by an auction directly on the exchange and without the participation of an underwriter. Such "primary direct listings" constitute a new alternative to the traditional underwritten initial public offering, which are typically priced by a negotiation between the issuer and the underwriter instead of an auction, and which typically involve a distribution of the issuer's securities by an underwriter.

The final order cited Professor Corrigan's work in connection with the claim that primary direct listings "will provide an alternative way to price securities offerings that may better reflect prices in the aftermarket, and thus may allow for efficiencies in IPO pricing and allocation."

Click here to read the SEC order that cites Corrigan's paper. His paper can be found on SSRN.