Abstract
We examine the interaction of two processes for gathering information required for pricing unseasoned securities: i)mechanisms for eliciting information directly from investors, and ii)information revelation through when - issued trading, i.e. forward trading in not - yet-issued securities. We find that the structure of the optimal direct mechanism changes if/when - issued trading becomes possible. Such trading can interfere with the process of eliciting information directly from investors. But, unless information is closely held and the when-issued market is unable to attract broad participation, permitting such trading will increase the expected proceeds of a securities issue, thus benefiting issuers.
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