This study investigates the information conveyed by intrafirm exchange offers. I find that leverage increases and leverage decreases convey qualitatively different information. Leverage-increasing offers appear to lower investors' assessment of risk of the firm's common stock, but do not appear to change their expectations of cash flows; leverage-decreasing offers appear to lower investors' expected cash flows, but do not appear to change their assessment of risk. The nature of changes in leverage, capital outlays, and dividends is also asymmetric. Further, I find that, for leverage-increasing offers, corporate control activity does not explain the information content or its asymmetry.

Going public typically leads to a separation of managerial control and stock ownership, and potentially worsens managerial incentives. We document that the median ownership stake of officers and directors declines significantly from the year before going public to ten years later. Median operating return on assets also declines from the year before the offering to the end of the first year of public trading, but performance declines no further in ten years. In general, operating performance both within one year of the offering and during the first ten years of public trading is unrelated to ownership of officers and directors.