Search

Copyright of Jurist-Diction is the property of Universitas Airlangga and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

We analyze the market impact of a partial vertical integration whereby a subset of retail firms acquire, through a private placement operation, a non-controlling stake in the capital of an upstream firm, which supplies an essential input. In addition, we assume that this upstream firm can price discriminate between the retail firms which (now) own a stake in its capital and all of their retail rivals. We find that price discrimination is optimal and, compared to a vertical separation scenario, there is input foreclosure, a higher retail price, and lower social welfare, which suggests that, from a competition policy viewpoint, such partial vertical integrations should be analyzed with particular concern. On the other hand, incentives are such that conducting a private placement operation of the upstream firm's capital yields gains from trade, and we are able to identify the optimal characteristics of such an operation. [ABSTRACT FROM AUTHOR]

This article conducts a review of the literature on private placement and analyzes the risks facing China's real estate companies. It argues that, within the framework of China's hybrid economic model, private placement can serve as a market-oriented financing mechanism and risk mitigation strategy beyond the traditional banking system. The article focuses on the characteristics of private placement, prevalent hypotheses, and influencing factors. It also traces the evolution of financialization in the global real estate industry, outlines the development model of China's real estate sector, and discusses the challenges and risks it encounters. Private placement offers various advantages, including reducing corporate leverage, strengthening working capital, and addressing information asymmetry issues. However, existing research in this field is still insufficient. Therefore, future research can provide a more robust theoretical foundation and guidance for policymakers, investors, and businesses. [ABSTRACT FROM AUTHOR]

The private placement of A-shares gained momentum with the release of the Administrative Measures for Securities Issuance of Listed Companies in 2006. This led to enhanced research on the impact of private placement on stock prices. In 2012, the Chinese government relaxed the requirements for directed issuance of listed companies, resulting in a surge of directed issuance since then. This study uses a sample of listed companies that conducted private placements in the A-share market between 2013 and 2021, to analyze the impact of investor sentiment on stock price differences after private placements from the perspective of short and long-term excess returns. This study constructs the non-main investor sentiment of individual stocks using high-frequency tick data of individual stocks and explores the relationship between this stock price anomaly and investor sentiment using multiple regression analysis. The results show a positive short-term announcement effect of A-share private placements, with the excess return rate occurring mainly before the plan announcement date. The stock price difference from the plan announcement date to ten trading days thereafter has a significantly negative relationship with the excess return rate. Furthermore, investor sentiment in private placements may negatively affect long-term stock performance. This study suggests that this phenomenon is caused by higher investor sentiment pushing stock prices upward in the short term, causing them to deviate from fundamentals, creating mispricing, and then driving them back to fundamentals, with information disclosure. After controlling for the severity of information disclosure, the effect of investor sentiment on long-term stock price performance becomes insignificant. [ABSTRACT FROM AUTHOR]

Research aims: This study examines the background of selecting the equity offering mechanism between rights issues and private placements when facing asymmetric information and overvalued prices Design/Methodology/Approach: This research employs the concept of information asymmetry and focuses on analysing market timing data about stock offering transactions in Indonesia from 2000 to 2020. This study uses regression analysis to examine the correlation between information asymmetry and trade volume. Abnormal trade volume before various offerings is subjected to regression analysis using generally used proxies for information asymmetry. Research findings: The conclusions of our research indicate that companies that issue more shares than the overpriced stock tend to exhibit a more excellent abnormal return value in the context of rights issues. The sales volume indicates the company's prospects derived from private information obtained during the offering. Theoretical contribution/Originality: There is a shortage of existing literature about research that specifically investigates the identification of SEO techniques that elicit negative market responses. Consequently, this study explores the connection between the underlying motivations driving the selection of stock offering mechanisms. Practitioner/Policy implication: The distribution of profits in the transaction indicates the company's future policies. Before investing, investors can acquire pertinent information on the company's current state, strategic goals, and prospects. Research limitation: The present analysis has not considered the factors of internal ownership or insider trading. These factors might serve as a foundation for investigating the underlying incentives for issuing shares with more precise market timing considerations. [ABSTRACT FROM AUTHOR]

Purpose: This research looks at how the choice of share offering mechanism between public offering, rights issue, and private placement implies certain information about the condition of the issuing company. Design/Methodology/Approach: Issuance of shares through market timing considerations clarifies essential information. Not much available literature focuses on SEO mechanisms that have an adverse market reaction. The gap in this study is about the relationship between the motivations behind selecting the share issuance mechanism. Findings: One of the results of this study found that companies that offer a large number of shares when overvalued choose to use the rights issue mechanism because they print higher abnormal returns than other mechanisms. These findings indicate that the bidding mechanism and issuance motivation reflect favourable information about the company's prospects from the offer. The allocation of profits from the transaction reflects future corporate policy information. Further empirical evidence states that companies that choose private placements with market timing considerations face a more severe problem of asymmetric information than companies that choose other mechanisms. Practical implications: Thus, investors can obtain information about the company's conditions, plans and prospects before investing. This study uses data specific to information asymmetry and market timing on stock offering transactions in Indonesia to represent emerging markets for the 2000-2020 period. [ABSTRACT FROM AUTHOR]

Debentures are the debt securities issued by the government, or any other profit orientated corporate according to their needs. Debt raised on the long term basis gives benefit to the corporate if they are financially stable. Corporate have to raise money through debt to avail tax advantage. This paper analyzes the debentures issued by corporate in the primary market in India and traded in the wholesale debt market, NSE. The study used mean, standard deviation, co-efficient of variation for interpreting the results of the study and found that the trading price in whole sale debt market has less volatility. [ABSTRACT FROM AUTHOR]

Investor behavior around an initial public offering or private placement can make the difference between a successful investment or a potential loss. Through the present research, the correlation of investors' behavior with the possible discount of the share granted in the case of initial offers was sought. The large number of companies listed on the Bucharest Stock Exchange in 2021(23) compared to 2020(3) denotes the fact that the SARS-COV2 virus was a certain catalyst of interest for investors and companies to enter the Romanian capital market. From another point of view, we observe a strong orientation of companies towards MTF AeRO. Out of the total of 26 analyzed companies, only 3 of them chose the regulated market for trading. [ABSTRACT FROM AUTHOR]

This study examines distress resolution under concentrated equity ownership and concentrated bank debt. Using a large sample of Korean financially distressed firms, I find that distress resolution is more likely when private placements of new equities are accompanied by a change in control. Control transfers in which new blocks are created through equity capital injection contribute to operational efficiency and long‐term performance. These findings suggest that equity capital injection and monitoring by new blockholders are essential for distress resolution under poor investor protection, which further explains why concentrated ownership may persist under such an environment. [ABSTRACT FROM AUTHOR]

Following the reform of shareholder structures in China, the country's listed companies have seen a boom in asset injection using private equity placements. However, because of continuing weaknesses in corporate governance structures and accounting regulations on related‐party transactions, it is possible for controlling shareholders to 'tunnel' listed companies through unsound private placements. We find that manipulation of the discount rate offered in private placements, accompanied by earnings management behaviour, is used by controlling shareholders to 'tunnel' listed companies during the private placement and asset‐injecting process. [ABSTRACT FROM AUTHOR]

Copyright of Taiwan Financial & Economic Law Review is the property of Charitable Trust Fund for Taiwan Finance, Enterprise & Banking Law and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper extended the works of Wruck in 1989, and Hertzel and Smith in 1993 by incorporating the effects of corporate reputation on shareholders' gains and market discounts in private equity placements (PEPs) taking data from the Chinese markets. Results demonstrate that corporate reputation significantly influences the shareholder's gains in PEPs. Besides, factors such as market discounts, offering percentage, and connected transactions are positively related to the announcement effects whereas changes in ownership concentration negate the shareholders' returns. By contrast, market discounts show a negative association with reputation status, indicating that reputation serves as a mitigating factor for resolving a firm's undervaluation problem. These findings expect to help greatly to the managerial decision of PEP issuers in an emerging market. [ABSTRACT FROM AUTHOR]

Companies in India have a broad spectrum of choices available for mobilization of financial resources that incudes public issues, right issue, bonus issues, and private placement. The present study contains a detailed analysis of the number of funds mobilized through these modes and changes in their preference over the study period. We observed a significant surge in preference for debt capital over the equity capital among the Indian corporates. Private placement of debt security has remained the most preferred mode of resource mobilization followed by public issue of bonds and NCDs, IPO, and right issue whereas the FPO has remained the least preferred mode of raising funds. Except for offering for sale, all three modes of raising equity capital (i.e. IPO, Right issue, and QIP) witnessed a downward trend in terms of the amount raised during the study period. The highest amount of resources were mobilized by the banking and financial Institutions industry followed by the power and finance industry. [ABSTRACT FROM AUTHOR]

We examine private issuance of public equity (PIPE) in China, and our results suggest that PIPE investors benefit from the price manipulation before and after issuance. These investors tend to cash out after lockup expiration and make large profits. We also find evidence that the trading of PIPE investors after lockup expiration is informed. Tests about the abnormal returns in the 3 years after lockup expiration suggest that at least part of the benefits PIPE investors receive come from wealth transfer from outside investors. Overall, PIPE issuers in China seem to use an opaque mechanism to compensate PIPE investors. [ABSTRACT FROM AUTHOR]

The rarity of rights issues in the United States makes it difficult to examine the choice between alternative seasoned equity offering (SEO) methods in that market. In Australia, however, both rights issues and private placements are prevalent. We therefore use the Australian market to test whether regulation influences a firm's choice between rights issues and private placements. When a firm decides to issue seasoned equity in Australia, regulation favours private placements if the issue is small or needs to be completed quickly. Consistent with regulations affecting the choice between SEO types, our empirical results provide evidence that firms in Australia are more likely to choose a private placement for small issues or when taking advantage of temporary periods of overvaluation. JEL Classification: G12, G14 [ABSTRACT FROM AUTHOR]

With the gradual completion of the split-share structure reform, private placement has gradually become the mainstream of refinancing. One of the points that the practical and theoretical circles are widely concerned about is that the private placement price is often higher than the market price at the time of the private placement. High discounts are often accompanied by the transmission of benefits, and the increase in insider information will lead to the risk of a stock market crash? This paper intends to use the data of A-share listed companies from 2006 to 2015 to empirically study the relationship between the discount on private placements and the risk of stock market crash. At the same time, this paper examines whether the degree of information asymmetry plays a regulatory role in the relationship between the discount on private placements and the risk of stock market crash. This paper provides a certain reference for the regulatory authorities to improve the relevant laws and regulations in the private placement, and to provide a certain reference for the protection of the interests of small and medium-sized investors. [ABSTRACT FROM AUTHOR]

Using data on companies that have implemented private placements in China from 2011 to 2016, we examine the discount on private placements, short-term stock returns, and long-term performance after the placements. Our goal is to determine whether the prevailing certification and entrenchment hypotheses can explain managerial placements. We find that the participation of managerial investors has a significant and negative impact on short-term stock returns. Such a negative effect can also be found on issuing companies' long-term profitability. Moreover, managerial placements have a higher discount than nonmanagerial placements. Our findings suggest that managerial placement is consistent with the entrenchment hypothesis but not the certification hypothesis. [ABSTRACT FROM AUTHOR]

What role on earth do the institutional investors play in the private placement of listed company? Is it the “balance of interests” or the “large shareholders of conspiracy”? In this paper, we measured the private placement discount and financing purposes to examine the role of institutional investors in the targeted private placement. The research shows that the large shareholders deliver self-benefit through higher discount of private placement, and with the increase in the proportion of large shareholders, the discount rate is significantly higher. The participation of institutional investors can effectively reduce the issuance discount rate. The large shareholders were more involved in the capital operation case of the private placement from the standpoint of their own interests, while institutional investors were more involved in the project financing case of the private placement. The results of the study indicate that institutional investors play a passive role in the private placement led by large shareholders. Institutional investors do not collude with large shareholders to manipulate pricing and operate the capital, instead they are project participants, who get stock at a high price and promote enterprise projects. Institutional investors have played a key role in balancing large shareholders interests, maintaining market equity, and promoting the rational allocation of resources as well as protecting the interests of small and medium-sized investors. [ABSTRACT FROM AUTHOR]

This paper empirically explores the relationship between the issuance of bonds with detachable warrants and firm value and the relationship between growth and firm value at the issuance of such bonds. Twelve years of data for 721 issuances of 451 Korean listed firms are analyzed using a panel regression model. We find that at the issuance of bonds with detachable warrants, the change in firm value is strongly correlated with large shareholder ownership concentration and issuance form, and the effect of growth on firm value is strongly correlated with the cash flow condition of the issuing firm. The results indicate that the ownership structure and the cash flow condition of the issuing firm and the form of issuance are important determinants of the relationship between the issuance of bonds with detachable warrants and firm value; these results are applicable to an analysis of the mixed market reactions of convertible bonds or bonds with warrants issues across different countries. They also offer the policy implication that the Korean government’s decision to entirely prohibit firms from issuing bonds with detachable warrants may have been excessive.