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Journal of Financial Stability Vol. 26 2016

Investor protection and firm value: Evidence from PIPE offerings

Kose John1,2; Ravi S. Mateti3; Gopala Vasudevan4; Khaled Amira5

1 New York University · 2 Temple University · 3 Concordia University · 4 University of Massachusetts Dartmouth · 5 Johns Hopkins University

Abstract

We find that PIPE issues that do not provide any protections to investors convey positive information about the firm and result in positive announcement period returns. However, PIPE issues that provide protections do not convey any new information about the firm and hence do not result in significant positive or negative announcement period returns. PIPE issuers that offer no protections to investors outperform their matched portfolios for up to 9 months after the issue. PIPE issuers that offer protections underperform their matched portfolios for 18 to 36 months after the issue.

DOI
10.1016/j.jfs.2016.07.016
Volume
26
Pages
78-89
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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