Investor protection and firm value: Evidence from PIPE offerings

Kose John, Ravi S. Mateti, Gopala Vasudevan and Khaled Amira

Journal of Financial Stability, 2016, vol. 26, issue C, 78-89

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.

Keywords: Private investment in public equity (PIPE); Equity PIPEs; Convertible debt PIPEs; Cumulative abnormal returns; Long-run performance (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finsta:v:26:y:2016:i:c:p:78-89

DOI: 10.1016/j.jfs.2016.07.016

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