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Initial public offerings by mutual thrifts: The regulatory impact

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  • Steven Cox
  • Dianne Roden

Abstract

This study analyzes the abnormal returns from a sample of 311 mutual thrift IPOs to investigate the presence of deliberate underpricing and to measure the impact of the changing regulatory environment. The large initial returns are maintained over the following year, indicating deliberate underpricing. Cross-sectional regressions show that the adjusted returns are positively related to the percentage of insiders participating in the IPO and to the size of the conversion. The adjusted returns significantly decrease after regulations are tightened, and there is a rapid rise in adjusted returns when uncertainty is introduced relating to the actual impact of these regulations. (JEL G280) Copyright Springer 1999

Suggested Citation

  • Steven Cox & Dianne Roden, 1999. "Initial public offerings by mutual thrifts: The regulatory impact," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 23(2), pages 113-122, June.
    • Handle: RePEc:spr:jecfin:v:23:y:1999:i:2:p:113-122
    DOI: 10.1007/BF02745945
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    References listed on IDEAS

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    1. Maksimovic, Vojislav & Unal, Haluk, 1993. "Issue Size Choice and "Underpricing" in Thrift Mutual-to-Stock Conversions," Journal of Finance, American Finance Association, vol. 48(5), pages 1659-1692, December.
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    8. Cagle, Julie A. B. & Porter, Gary E., 1997. "Conversions of mutual savings institutions: Do initial returns from these IPOS provide investors with windfall profits?," Financial Services Review, Elsevier, vol. 6(2), pages 141-150.
    9. Christopher B. Barry & Robert H. Jennings, 1993. "The Opening Price Performance of Initial Public Offerings of Common Stock," Financial Management, Financial Management Association, vol. 22(1), Spring.
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    Cited by:

    1. Kenneth A. Carow & Steven R. Cox & Dianne M. Roden, 2007. "The Role of Insider Influence in Mutual‐to‐Stock Conversions," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(6), pages 1285-1304, September.
    2. Carow, Kenneth A. & Cox, Steven R. & Roden, Dianne M., 2004. "Mutual holding companies: Evidence of conflicts of interest through disparate dividends," Journal of Banking & Finance, Elsevier, vol. 28(2), pages 277-298, February.
    3. Vithessonthi, Chaiporn, 2014. "What explains the initial return of initial public offerings after the 1997 Asian financial crisis? Evidence from Thailand," Journal of Multinational Financial Management, Elsevier, vol. 27(C), pages 89-113.

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