| Abstract: | This paper presents an empirical investigation of share price returns for companies threatened with suspension by the Australian Stock Exchange (ASX) for failing to either (1) pay their annual listing fees or (2) lodge a required report on time. The threatened companies experienced an average return over the event window that was significantly below the average return for both a market index and a similarly sized control portfolio. This suggests that the threat of suspension has information content. Interestingly, the major impact came from those companies that avoided suspension by lodging interim reports subsequent to the threat announcement indicating that significant new negative information was conveyed to the market in the week following the threat. |
