Financial Visibility and the Decision to Go Private

• 成果类型: Article
• 署名作者: Mehran, Hamid; Peristiani, Stavros
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - New York
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhp044
• 发表日期: 2010
• 页码: 519
• 关键词: free cash flow; AGENCY COSTS; FIRMS; OWNERSHIP; IMPACT

摘要

A large fraction of the companies that went private between 1990 and 2007 were fairly young public firms, often with the same management team making the crucial restructuring decisions at both the time of the initial public offering (IPO) and the buyout. This article investigates the determinants of the decision to go private over a firm's entire public life cycle. Our evidence reveals that firms with declining growth in analyst coverage, falling institutional ownership, and low stock turnover were more likely to go private and opted to do so sooner. We argue that a primary reason behind the decision of IPO firms to abandon their public listing was a failure to attract a critical mass of financial visibility and investor interest. (JEL G34)