Investor Horizon and Disclosure Policies

The Role of Disclosure and Information Intermediaries in an Unregulated Capital Market: Evidence from Initial Coin Offerings

“…For ease of interpretation and to reduce potential measurement error, we next aggregate the 10 voluntary disclosure variables from column (1) into an ICO-specific summary measure of the level of disclosure (Disclosure Index) by taking their arithmetic sum. 15 Our self-constructed disclosure index t. bourveau, e. t. de george, a. ellahie, and d. macciocchi is conceptually similar to disclosure quantity measures that count the number of items and exhibits in 8-Ks (He and Plumlee [2020]; Cadman, Heinle, and Macciocchi [2021]; Ellahie, Hayes, and Plumlee [2021]), AIMR disclosure rankings (e.g., Lang and Lundholm [1993], Botosan and Plumlee [2002]), and Standard & Poor's (S&P) transparency and disclosure scores. In column (2), we find a positive and statistically significant relation between Raised and Disclosure Index (t = 9.29), which is consistent with the findings for the individual disclosure variables in column (1).…”

“…This is significantly higher than the average lock-up period of six months usually observed in the IPO market. Overall, we interpret the disclosure of allocations, vesting restrictions, and lock-up periods for insiders' tokens as an attempt to signal commitment, skin in the game, and incentive alignment, which can help build trust with investors in a manner similar to the IPO market (Brav and Gompers [2003], Cadman, Heinle, and Macciocchi [2021]).…”

Institutional Blockholders and Voluntary Disclosure

“…We find that blockholdings reduce a firm's propensity to host conference calls. Third, we follow Guay et al (2016), Segal and Segal (2016), Bourveau et al (2018), Cadman et al (2019), and Bao et al (2019) and use the number of 8-K filings to measure voluntary disclosure. We confirm that higher blockholdings reduce the number of voluntary 8-K filings.…”