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Liquidity Risk, Leverage and Long-Run IPO Returns

Eckbo, B Espen; Norli, Øyvind - C.E.P.R. Discussion Papers - 2005

We examine the risk-return characteristics of a rolling portfolio investment strategy where more than six thousand Nasdaq initial public offering (IPO) stocks are bought and held for up to five years. The average long-run portfolio return is low, but IPO stocks appear as ‘longshots’, as...

Persistent link: https://www.econbiz.de/10005124287

Bad Bank(s) and Recapitalization of the Banking Sector

Schäfer, Dorothea; Zimmermann, Klaus F - C.E.P.R. Discussion Papers - 2009

-out unit, a so-called bad bank. The key element of the plan is the valuation of troubled assets at their current market value … recapitalize the good bank by taking an equity stake in it. In extreme cases, this would mean a takeover of the bank by the …. A clear emphasis that the government stake is temporary would also be necessary. The government would cover the bad bank …

Persistent link: https://www.econbiz.de/10005034765

Venture Capital: A Case for Investment Promotion

Keuschnigg, Christian - C.E.P.R. Discussion Papers - 1998

Venture capitalists provide risk capital and valuable monitoring services that are essential for the success of upstart companies. The financial sector’s expertise in monitoring investment proposals may increase with the accumulated experience in funding such projects. In the other direction,...

Persistent link: https://www.econbiz.de/10005661515

The Choice of Seasoned-Equity Selling Mechanism: Theory and Evidence

Eckbo, B Espen; Norli, Øyvind - C.E.P.R. Discussion Papers - 2005

Extending the Myers and Majluf (1984) framework, we present a model for the choice of seasoned-equity selling mechanism. A sequential pooling equilibrium exists which implies a positive market reaction to certain flotation strategies. We examine the model implications using the market reaction...

Persistent link: https://www.econbiz.de/10005114232

Conflicts of Interest in Sell-Side Research and the Moderating Role of Institutional Investors

Ljungqvist, Alexander P.; Marston, Felicia; Starks, Laura T - C.E.P.R. Discussion Papers - 2005

Because sell-side analysts are dependent on institutional investors for performance ratings and trading commissions, we argue that analysts are less likely to succumb to investment banking or brokerage pressure in stocks highly visible to institutional investors. Examining a comprehensive sample...

Persistent link: https://www.econbiz.de/10005114250

The Evolution of Aggregate Stock Ownership---A Unified Explanation

Rydqvist, Kristian; Spizman, Joshua; Strebulaev, Ilya - C.E.P.R. Discussion Papers - 2009

Since World War II, direct stock ownership by households has largely been replaced by indirect stock ownership by financial institutions. We argue that tax policy is the driving force. Using long time-series from eight countries, we show that the fraction of household ownership decreases with...

Persistent link: https://www.econbiz.de/10004969127

Do Funds Make More When They Trade More?

Pastor, Lubos; Stambaugh, Robert F.; Taylor, Lucian - C.E.P.R. Discussion Papers - 2014

We find that active mutual funds perform better after trading more. This time-series relation between a fund’s turnover and its subsequent benchmarkadjusted return is especially strong for small, high-fee funds. These results are consistent with high-fee funds having greater skill to identify...

Persistent link: https://www.econbiz.de/10011083863

The Microstructure of Stock Markets

Biais, Bruno; Glosten, Larry; Spatt, Chester S - C.E.P.R. Discussion Papers - 2002

We survey the literature analysing the price formation and trading process, and the consequences of market organization for price discovery and welfare. We develop a united perspective on theoretical, empirical and experimental approaches. We discuss the evidence on transaction costs and the...

Persistent link: https://www.econbiz.de/10005788974

Financial Distress and Bank Restructuring of Small to Medium Size UK Companies

Franks, Julian R; Sussman, Oren - C.E.P.R. Discussion Papers - 2003

creditors’ runs. We find that the principal lender, ‘the bank’, makes few concessions to the borrower and that there is a … virtual absence of debt forgiveness. Finally, the bank relies heavily on the highly collateralized value of its loan in making …

Persistent link: https://www.econbiz.de/10005788979

Arbitrage with Inelastic Liquidity Demand and Financial Constraints

Attari, Mukarram; Mello, Antonio S - C.E.P.R. Discussion Papers - 2001

This paper derives arbitrage trading strategies taking into account the fact that the actions of arbitrageurs impact prices. This avoids the difficulty of having to rely on exogenous position limits to prevent infinite arbitrage profits. When arbitrageurs are financially constrained their...

Persistent link: https://www.econbiz.de/10005136768