January 2024
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Publications (32)
September 2023
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8 Reads
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3 Citations
Finance Research Letters
January 2022
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11 Reads
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2 Citations
SSRN Electronic Journal
June 2021
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38 Reads
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9 Citations
Journal of Corporate Finance
Confidentially marketed public offers (CMPOs) represent a popular innovation in the market for seasoned equity offers (SEO) despite large negative announcement reactions. We find that CMPOs are often used by small firms with negative operating cash flows to raise a relatively substantial amount of capital, which is used largely for R&D intensive investments. We argue that the confidential marketing associated with CMPOs has made them a popular way for small firms to make fast-paced public offers, which are known to have reduced price pressure, while sidestepping the problem of inelastic demand. These firms are willing to trade off more negative announcement reactions for the chance to privately assess their prospects for raising capital.
October 2020
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90 Reads
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40 Citations
Financial Management
Many corporate executives believe blockchain technology is broadly scalable and will achieve mainstream adoption, yet there is little evidence of significant shareholder value creation associated with corporate adoption of blockchain technology. We collect a broad sample of firms that invest in blockchain technology and examine the stock price reaction to the “first” public revelation of this news. Initial reactions average close to +13% and are followed by reversals over the next 3 months. However, we report a striking difference based on the credibility of the investment. Blockchain investments that are at an advanced stage or are confirmed in subsequent financial statements are associated with higher initial reactions and little or no reversal. The results suggest that credible corporate strategies involving blockchain technology are viewed favorably by investors.
August 2019
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38 Reads
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22 Citations
Journal of Banking & Finance
This study examines the role of activist investors in firms’ decisions to conduct open market share repurchases. Compared with firms making ordinary share repurchases, firms making activist-involved repurchases have more cash holdings, are more undervalued, experience better subsequent stock performance and similar improvements in operating performance, and eventually repurchase more shares. Moreover, repurchasing firms in which an activist investor claims to take a passive role exhibit no undervaluation, and repurchasing firms that make multiple repurchases exhibit share undervaluation only in repurchases where an activist is involved. In all, our findings suggest that activist-involvement is associated with improved corporate repurchase decisions.
July 2019
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20 Reads
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7 Citations
Journal of Financial Markets
We find that investors react more favorably to corporate announcements of share repurchases, SEOs, earnings, dividend changes, and acquisitions if the announcement is made immediately prior to or on holidays. These announcements are associated with more positive reactions for favorable events and less negative reactions for unfavorable events. This effect is robust to controls for market conditions and a selection bias, is accompanied by subsequent reversals, and is present in several international markets. Our findings suggest that predictable individual mood changes can cause biases in market reactions to firm-specific news.
January 2019
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34 Reads
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3 Citations
Review of Quantitative Finance and Accounting
We test the hypothesis that underwriters set higher gross spreads and deeper offer price discounts in seasoned equity offers of firms exhibiting weak shareholder rights as compensation for increased reputational risk and legal liability. Alternatively, if market participants are fully aware of the risks related to weak shareholder rights and efficiently price them, then underwriters arguably do not need to adjust issuance costs for firms with weak governance. Our results indicate that, on average, shareholder rights and direct issue costs are unrelated, supporting an efficient pricing view. However, upon closer examination, we find that underwriters charge higher gross spreads when the issuing firm has either an extremely low level of shareholder rights or a substantially lower level than expected, which are likely the cases in which the underwriter’s reputational risk is highest.
January 2019
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48 Reads
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3 Citations
SSRN Electronic Journal
December 2017
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15 Reads
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4 Citations
Journal of Corporate Finance
We find that the level of short interest in a firm's stock significantly predicts future seasoned equity offers (SEOs). The probability of an SEO announcement increases by 34% (decreases by 49%) for firms in the top (bottom) quintile of short interest. We identify a causal impact of short interest on SEO issuance using a novel instrument for short interest based on future litigation filings in close geographical proximity to hedge fund centers. Our findings suggest that corporate decisions can be triggered by the aggregate trading activity of sophisticated outside investors.
Citations (22)
... However, despite the high conceptual potential of blockchain technology, large-scale blockchain applications to operations and supply chain management remain surprisingly scarce (Babich and Hilary, 2020). For example, Autore et al. (2021) report that as of June 2019, only 262 NYSE-and Nasdaq-listed firms, along with 235 over-the-counter-listed firms, had ever invested in blockchain technology. Klöckner et al. (2022) also show that only 100 individual firms among the 1,654 MSCI World Index constituents announced blockchain initiatives over the 2015-2019 period. ...
- Citing Article
October 2020
Financial Management
... Moreover, Crane et al. (2016) show that institutional ownership leads to higher share repurchases as well as higher total payouts. Concerning the timing of share repurchases, Autore et al. (2019) find that shareholder activism can influence firms to announce buybacks during periods of undervaluation. ...
- Citing Article
August 2019
Journal of Banking & Finance
... Later, research analyzed whether investor inattention affects the market response to merger announcements [4][5][6][7]. Finally, some research has extended the focus to corporate news events other than earnings and merger announcements, including announcements of stock repurchases, seasoned equity offerings and dividend changes [8,9] as well as analyst recommendation changes [10]. ...
- Citing Article
July 2019
Journal of Financial Markets
... Объявления о тестировании технологии или о стратегическом видении технологии блокчейн положительным образом влияют на капитализацию крупных компаний [1], и сегодня, похоже, нельзя иметь статус технологического лидера без инвестиций в блокчейн проекты 2 . Вероятно, вышеприведенные факторы должны бы были свидетельствовать о начинающейся зрелости технологии, если бы не факт отсутствия скольконибудь массовой адаптации блокчейна за пределами биткоина и криптовалют. ...
- Citing Article
January 2019
SSRN Electronic Journal
... Furthermore, the implications of reputational risk in banks have been studied by 10 articles. These include loss of current or prospective customers, loss of employees or managers, loss of current or prospective business partners, increased cost of capital, loss of competitive advantage, loss in market value of firm, etc. Although, the literature in this research area is predominantly focused on issues of control measures adopted in RRM, eleven (11) articles addressed overlapping issues of measurement, determinants, implications, and control of reputational risk in banks (Autore et al., 2019;Barakat et al., 2019;Trostianska & Semencha, 2020). ...
- Citing Article
- Publisher preview available
January 2019
Review of Quantitative Finance and Accounting
... The first group of PIPEs consists of those in which issuing firms were sued in securities class action lawsuits before the 1 These summary statistics about PIPEs and SEOs are obtained from PrivateRaise and SDC databases, respectively. 2 This frequency of litigation actions on PIPE issuers listed on NYSE and NASDAQ is much higher than the frequency of litigation actions in all public firms (including OTC firms) reported in the existing literature (Hanley & Hoberg, 2010;Krishnan et al., 2012;Autore et al. 2014), which is around 7%-10%. 3 See, for example, Boehmer et al. (2008); Karpoff and Lou (2010); Berkman and McKenzie (2012); Engelberg et al. (2012); Boehmer and Wu (2013) ;Autore et al. (2018); and Boehmer et al. (2020). 4 Traditional PIPEs are private placements where the securities are sold at a predetermined price and include common stock, fixed convertible preferred stock, and fixed convertible debt. ...
- Citing Article
December 2017
Journal of Corporate Finance
... 5 Lawsuits are a major threat for U.S corporations and are associated with lower firm value (Bhagat and Romano 2002;Viscusi and Hersch 1990), CEO turnover (Humphery-Jenner 2012), and firm failure Lott 1993, 1999;Phillips and Miller 1996;Johnson et al. 1999Johnson et al. , 2000. Lawsuits can change corporate governance practices (Brochet and Srinivasan 2014;Fich and Shivdasani 2007;Bradley et al. 2014;Bradley and Chen 2011), influence shareholder wealth (Karpoff et al. 2008), have significant effects on corporate costs and operations (Klein and Leffler 1981;Jarrell and Peltzman 1985), cause negative stock price reaction (Bhagat et al. 1998;Gande and Lewis 2009;Bhattacharya et al. 2007), may effect pre and post IPO characteristics (Lin et al. 2013;Qing 2011;Banerjee et al. 2011), change the cost of capital (Dechow et al. 1996;Murphy et al. 2009;Chava et al. 2010), and modify firms' financing (Arena and Julio 2015;McTier and Wald 2011;Hutton et al. 2014;Cumming et al. 2017) or payout policies (Arena and Julio 2016). ...
- Citing Article
January 2013
SSRN Electronic Journal
... With imbalance information available in the market, shareholders demand for new stocks and bonds. Therefore, exterior shareholders demand for low cost for new issues of stocks or bonds (Autore, 2004); if not, then interior shareholders should benefit because they could issue new securities with the false detail. Thus, in the POT, firms normally issue secure securities first because exterior shareholders need less discount on them. ...
- Citing Article
... Dessa forma, empresas que não cumprem estas demandas trabalhistas tendem a se envolver em ações judiciais, possibilitando a ocorrência de perdas financeiras. Essas possíveis perdas estão relacionadas a custos diretos relacionados ao procedimento legal, como custas judiciais, honorários advocatícios, multas ou acordos (Autore et al., 2014), ou custos indiretos, como a diminuição do valor de mercado, perda de motivação da força de trabalho e punição de reputação (Karpoff et al., 2008;Karpoff & Lott, 1993;Haslem et al., 2017). Como consequência, os litígios impactam negativamente o valor da empresa através da saída de fluxo de caixa. ...
- Citing Article
August 2014
Journal of Corporate Finance
... Dependent Variable: Lending Amount per Capita Hoffmann et al. (2015) and Thomas et al. (2021) defined the perception and feedback of investors as the degree of investor recognition of investment projects. Scholars such as Richardson et al. (2012), Autore and Kovacs (2014), and Liu (2019) have used the amount of investment to quantify the degree of recognition. On the basis of the above, we carried out per capita corrections on the variables. ...
- Citing Article
January 2013
Journal of Corporate Finance