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Type: Journal article
Title: Institutional ownership and the choice of equity issue method
Author: Karpavičius, S.
Suchard, J.
Citation: International Review of Financial Analysis, 2018; 56:73-84
Publisher: Elsevier
Issue Date: 2018
ISSN: 1057-5219
Statement of
Sigitas Karpavičius, Jo-Ann Suchard
Abstract: We examine how institutional ownership, which reflects the informational efficiency of stock prices (Boehmer and Kelley, 2009), impacts the seasoned equity offering (SEO) issue method choice between shelf offerings and traditional SEOs. We find that firms with greater institutional ownership, particularly long term ownership, tend to choose shelf offerings. We control for issue method choice and find that the offer discount decreases with institutional ownership for both shelf and traditional issuers and that higher institutional ownership reduces direct issue costs and is related to a shorter due diligence process for traditional SEOs. This suggests that underwriters are more likely to be able to perform the certification function (and with less effort) for issuers whose stock is priced more efficiently.
Keywords: Shelf registration; seasoned equity offering; institutional ownership
Rights: © 2018 Elsevier Inc. All rights reserved.
RMID: 0030081305
DOI: 10.1016/j.irfa.2017.12.009
Appears in Collections:Computer Science publications

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