Restricted Stock Discounts: An Empirical Analysis

McConaughy Daniel L. (), Hussein Monica and Dow James P.
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McConaughy Daniel L.: Department of Finance, Financial Planning and Insurance,California State University Northridge, Northridge, CA91330, USA
Hussein Monica: Department of Finance, Financial Planning and Insurance,California State University Northridge, Northridge, CA91330, USA
Dow James P.: Department of Finance, Financial Planning and Insurance,California State University Northridge, Northridge, CA91330, USA

Journal of Business Valuation and Economic Loss Analysis, 2019, vol. 14, issue 1, 14

Abstract: Examining 416 transactions over the 1996 to 2013 time period, we find that size, stock price volatility, block size, price-to-revenue, and EBITDA margin are significantly related to restricted stock discounts. We do not find registration rights or the initial holding period to be statistically significantly related to discounts. Our results suggest that simple correlations or sorting of discounts by various criteria do not capture what factors are statistically significantly related to restricted stock discounts in the complex world of private placement deals.

Keywords: restricted stock; illiquidity discounts; DLOM; private placements of stock (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1515/jbvela-2017-0008

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