IDEAS home Printed from https://ideas.repec.org/a/bla/finrev/v45y2010i3p743-759.html
   My bibliography  Save this article

Partial Price Adjustments and Equity Carve‐Outs

Author

Listed:
  • Thomas H. Thompson

Abstract

We examine the extent to which market‐adjusted ex date returns reflect public information for 271 equity carve‐outs in 1988–2006. Although prior studies focus on ex post determinants of equity carve‐out and initial public offering returns, our study is the first to explore ex ante predictors of equity carve‐out returns. We use three primary variables: filing range adjustments, the percentage of the offering used to retire subsidiary debt or to pay dividends, and the CBOE Volatility Index (VXO) to predict initial returns. We show that 11–35% of the variation in market‐adjusted equity carve‐out returns can be predicted using public information known prior to the offer date.

Suggested Citation

  • Thomas H. Thompson, 2010. "Partial Price Adjustments and Equity Carve‐Outs," The Financial Review, Eastern Finance Association, vol. 45(3), pages 743-759, August.
    • Handle: RePEc:bla:finrev:v:45:y:2010:i:3:p:743-759
    DOI: 10.1111/j.1540-6288.2010.00269.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1540-6288.2010.00269.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1540-6288.2010.00269.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dereeper, Sebastien & Mashwani, Asad Iqbal, 2018. "Equity carve-outs, divergence of beliefs and analysts’ following," Research in International Business and Finance, Elsevier, vol. 43(C), pages 58-67.
    2. Dasilas, Apostolos & Leventis, Stergios, 2018. "The performance of European equity carve-outs," Journal of Financial Stability, Elsevier, vol. 34(C), pages 121-135.
    3. Patrick M. Corrigan, 2022. "Does an initial public offering (IPO) issuer's Securities and Exchange Commission registration fee calculation method predict pricing revisions and IPO underpricing?," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 19(4), pages 1114-1147, December.
    4. Ma, Qing & Wang, Susheng, 2018. "Divestment options under tacit and incomplete information," Pacific-Basin Finance Journal, Elsevier, vol. 49(C), pages 15-29.
    5. Mashwani, Asad Iqbal & Dereeper, Sébastien & Dowling, Michael & Aziz, Saqib, 2020. "Learning the wealth effects from equity carve-outs," Finance Research Letters, Elsevier, vol. 33(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:finrev:v:45:y:2010:i:3:p:743-759. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/efaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.