The Economic Consequences of IPO Spinning

• 成果类型: Article
• 署名作者: Liu, Xiaoding; Ritter, Jay R.
• 署名单位: State University System of Florida; University of Florida
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhq002
• 发表日期: 2010
• 页码: 2024
• 关键词: investment; coverage

摘要

Using a sample of fifty-six companies going public in 1996-2000 in which top executives received allocations of other hot initial public offerings (IPOs) from the bookrunner, a practice known as spinning, we examine the consequences of spinning. The fifty-six IPOs had first-day returns that were, on average, 23% higher than similar IPOs. The profits collected by these executives were only a small fraction of the incremental amount of money left on the table by their companies when they went public. These companies were dramatically less likely to switch investment bankers in a follow-on offer: only 6% of issuers whose executives were spun switched underwriters, whereas 31% of other issuers switched. These findings suggest that the spinning of executives accomplished its goal of affecting corporate decisions.