Graduation Year
2019
Date of Submission
5-2019
Document Type
Open Access Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics
Reader 1
Professor Janet Smith
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2019 Jason S Barbarosh
Abstract
This paper explores private investments in public equity (PIPE) deals as a means of alternative firm financing. Poorly performing companies often look towards PIPEs to quickly raise capital when traditional means of financing are limited. This study provides an analysis on both the discount and premia that PIPEs are issued at, as well as the performance of firms after the deal announcement. Overall, this study finds that successful PIPEs from the investor’s perspective are issued at a discount of close to 17%, and unsuccessful PIPEs are issued at an average of a 15% premium. I find substantial cumulative abnormal returns of 9% over a three-day period due to positive information shocks. Overall, this thesis corroborates past research in the field.
Recommended Citation
Barbarosh, Jason S., "PIPE Discounts, Premia, and Performance" (2019). CMC Senior Theses. 2129.
https://scholarship.claremont.edu/cmc_theses/2129
