Monitoring via staging: Evidence from Private investments in public equity
I study the causes and consequences of staging in the setting of private investments in public equities (PIPEs). I find that, in PIPE investments, as in venture capital staging, the staging strategy is used by investors as a monitoring mechanism to mitigate information asymmetry and agency problems. Moreover, strategic investors and investors investing alone are more likely to utilize staging. I show also that staging reduces the cost of financing and has positive implications for PIPE issuers’ long-run stock performance.
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Volume (Year): 35 (2011)
Issue (Month): 12 ()
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"Financial Contracts in PIPE Offerings: The Role of Expert Placement Agents,"
Knut Wicksell Working Paper Series
2013/7, Knut Wicksell Centre for Financial Studies, Lund University.
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