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dc.contributor.authorMehran, Hamiden_US
dc.contributor.authorPeristiani, Stavrosen_US
dc.date.accessioned2010-05-05en_US
dc.date.accessioned2012-08-17T14:37:56Z-
dc.date.available2012-08-17T14:37:56Z-
dc.date.issued2009en_US
dc.identifier.urihttp://hdl.handle.net/10419/60935-
dc.description.abstractA large fraction of the companies that went private between 1990 and 2007 were fairly young public firms, often with the same management team making the crucial restructuring decisions both at the time of the initial public offering (IPO) and the buyout. Why did these public firms decide to revert to private ownership? To answer this question, we investigate the determinants of the decision to go private over a firm's entire public life cycle. Our evidence reveals that firms with declining growth in analyst coverage, falling institutional ownership, and low stock turnover were more likely to go private and opted to do so sooner. We argue that a primary reason behind the decision of IPO firms to abandon their public listing was a failure to attract a critical mass of financial visibility and investor interest. Consistent with the findings of earlier literature, we also find strong support for Jensen's free-cash-flow hypothesis, which argues that these corporate restructurings are a useful tool in capital markets for mitigating agency problems between insiders and outside shareholders.en_US
dc.language.isoengen_US
dc.publisherFederal Reserve Bank of New York New York, NYen_US
dc.relation.ispartofseriesStaff Report, Federal Reserve Bank of New York 376en_US
dc.subject.jelG00en_US
dc.subject.jelG30en_US
dc.subject.ddc330en_US
dc.subject.keywordFinancial visibilityen_US
dc.subject.keywordLBOsen_US
dc.subject.keywordgoing privateen_US
dc.subject.keywordanalyst coverageen_US
dc.subject.keywordinstitutional investoren_US
dc.subject.keywordinsider ownershipen_US
dc.titleFinancial visibility and the decision to go privateen_US
dc.typeWorking Paperen_US
dc.identifier.ppn606276939en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Staff Reports, Federal Reserve Bank of New York

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