This paper explores the role of investment banks and lock-up provisions in the market for new equity issues. In a sample of 2,794 IPOs, we test three potential explanations for the existence of lock-ups: (i) lock-ups serve as a signal of firm quality; (ii) lock-ups are a commitment device to...

We investigate the robustness of the long-term underperformance of initial public offering (IPO) and seasoned equity offering (SEO) firms from 1975-1992. The conclusion that issuer underperformance is unique is questioned by our results. We find that underperformance is largely concentrated in...

We investigate the long-run underperformance of recent initial public offering (IPO) firms in a sample of 934 venture-backed IPOs from 1972-1992 and 3,407 nonventure-backed IPOs from 1975-1992. We find that venture-backed IPOs outperform nonventure-backed IPOs using equal- weighted returns....

We study retail shareholder voting using a detailed and nearly universal sample of anonymizedretail shareholder voting records over the period 2015-2017. Contrary to public perception, wefind that retail shareholders are an influential voting bloc, affecting as many proposal outcomes asthe Big...

This paper studies how hedge fund activism impacts corporate innovation. Firms targeted by activists improve their innovation efficiency over the five-year period following hedge fund intervention. Despite a tightening in R&D expenditures, target firms increase innovation output, as measured by...

Hedge fund activism emerged as a major force of corporate governance in the 2000s. By the mid-2000s, there were between 150 and 200 activist hedge funds in action each year, advocating for changes in 200–300 publicly listed companies in the United States. In this article, we review the...

This is the first comprehensive study of mutual fund voting in proxy contests. Mutual funds tend to vote for dissident nominees at firms with weak operating and financial performance, and when dissidents are hedge funds. Notably, passive funds are more likely to support incumbent management than...

An important milestone often reached in the life of an activist engagement is entering into a “settlement” agreement between the activist and the target's board. Using a comprehensive hand-collected data set, we analyze the drivers, nature, and consequences of such settlement agreements....

The Brokaw Act was proposed legislation aimed at "financial abuses being carried out by activist hedge funds who promote short-term gains at the expense of long-term growth[.]" Sponsoring Senators named the for a small town in Wisconsin that, according to the Act's sponsors, was decimated by the...

Are event studies in securities litigation reliable? Basic's fraud-on-the-market presumption sparked the wide use of event studies in securities litigation, and the Supreme Court's 2014 decision in Halliburton will make event studies even more important, as litigants fight over the existence of...