2024 - Reprints: Finance and Accounting
Market timing in open market bond repurchases, Journal of Banking and Finance, 161, 2024.
N. Steinberg and A. Wohl
(Reprint No.: 426)
Research No.: 03621100
Bond repurchases are widespread in the US and other markets but data limitations have thus far prevented market-timing analysis. Using unique Israeli daily data we show that firms time the market in their actual open market bond repurchases. Bond repurchases typically follow price decline and result in significantly positive abnormal returns in the following days: about 1 % in five trading days. The market reaction is quicker within a pre-announced repurchase program, and it is stronger when the firm repurchases high-yield bonds or when the repurchase is preceded by positive net insider share purchases. The results lend support to the information motive for bond repurchases benefiting ongoing stakeholders but detrimental to selling bondholders.
What determines institutional investors' holdings in IPO firms?, International Review of finance, 21(4), 1302-1333, 2021.
A. Michel, J. Oded and I. Shaked
(Reprint No.: 427)
Research No.: 03280100
https://doi.org/10.1111/irfi.12326
We investigate the manner in which institutional investors' investments in IPO firms are related to IPO characteristics and pre-IPO operating performance. We find that institutions' initial holdings are strongly related to the public float (the fraction of shares floated to the public), but are unrelated to the ratio of primary-to-total shares issued. This suggests that institutions prefer IPOs that are associated with ownership structure change, and are indifferent to whether the motivation behind the IPO is fund raising or original owners' value liquidation. Moreover, initial institutional holdings are unrelated to commonly used measures of pre-IPO operating performance such as return on sales and return on assets. We also find that institutions are predisposed to invest in value firms rather than growth firms.
Institutional investors and firm performance: Evidence from IPOs, North American Journal of Economics and Finance, 51, 2020.
A. Michel, J. Oded and I. Shaked
(Reprint No.: 428)
Research No.: 03280100
We investigate the post-IPO evolution of institutional investor holdings and the manner in which operating performance is related to these holdings. During the first year after the IPO, average institutional holdings increase from 24% to 36% of shares outstanding and stabilize at about 42% by the end of the second year. We document that post-IPO operating performance is positively related to institutional holdings, but this relation subsides in the third year after the IPO. Overall, our findings indicate that institutional ownership is a valid indicator of the firm’s operating performance in its initial years as a public company.
The Impact of Social Investing on Charitable Donations, Management Science, 69(2), 1264-1274, 2023.
J. An, D. Briley, S. Danziger and S. Levi
(Reprint No.: 429)
Research No.: 08123100
We examine the impact of social investing on charitable donations using a unique data set consisting of investment behaviors and donation transactions for more than 10,000 customers of an investment app platform.We find that investors switching to a recently introduced social fund reduced their donations, mainly in charities supporting causes similar to those of the social fund.However, 79% of the investors that switched to the social fund did not donate before switching, so the social fund attracted more people to fund social causes. Still, because of the substitution effect, we estimate social funds have a positive effect on society only if their annual contributions to social causes are greater than 3.2% of the balance invested.
Insider trading and disclosure: The case of cyberattacks, SSRN, 2019.
E. Amir, S. Levi and T. Livne
(Reprint No.: 430)
Research No.: 08122100
We examine the relation between insider trading and corporate disclosure of cyberattacks. We distinguish between companies that voluntarily disclosed cyberattacks and those that withheld information on the incidents, and parties outside the attacked company later discovered the incident. We find insiders sell stocks in cases their firm withholds information on the cyberattack from investors. However, in firms that voluntarily disclosed information about the attack, we find insiders are less likely to sell shares when information is still private. We also find that managers are less likely to withhold and sell stocks in states that require companies to disclose data breaches to the state attorney general. The requirement to disclose a breach to the state attorney marks the breach as a significant event, on which insiders are less likely to trade before disclosure because of higher litigation risk. When disclosure requirements are less strict and disclosure is virtually voluntary, insiders trade after withholding information on the cyberattack. The results demonstrate the relation between disclosure and insider trading, and in particular show managers are more (less) likely to trade on private information that they know the company will withhold (disclose).
