Control as a motivation for underpricing: a comparison of dual and single-class IPOs

• 成果类型: Article; Proceedings Paper
• 署名作者: Smart, SB; Zutter, CJ
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh; Indiana University System; IU Kelley School of Business; Indiana University Bloomington
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(03)00109-0
• 发表日期: 2003
• 页码: 85-110
• 关键词: initial public offerings (IPO); Underpricing; Dual class; Ownership structure; governance

摘要

We find that dual-class firms experience less underpricing than single-class firms and explore several hypotheses which explain this phenomenon. Compared to single-class firms, dual-class companies have slightly higher post-IPO institutional ownership and experience fewer control events. Although dual-class firms achieve a lower underpricing cost, they trade at lower prices relative to earnings and sales than single-class IPOs. This pricing differential, combined with evidence that dual-class managers earn higher compensation and that dual-class shares are common among media and entertainment industry IPOs, suggests that dual-class ownership structures protect private control benefits. (C) 2003 Elsevier Science B.V. All rights reserved.