SEC enforcement in the PIPE market: Actions and consequences

The influence of investor identity and contract terms on firm value: Evidence from PIPEs

“…To see to what degree this influences market reactions, we next explore announcement reactions to the subsample of PIPE contracts when there are no contract terms reported in the S-1, S-2, S-3, SB-2 documents. 14 Brophy et al (2009), Chaplinsky andHaushalter (2010), and Bengtsson et al (2014) provide a thorough institutional framework describing the timeline of events around the PIPE closing date and the disclosure of publicly-available documents that are associated with the dissemination of information in PIPE transactions.…”

Shareholder litigation and short selling ahead of private equity placements

“…The median duration from the lawsuit filing to lawsuit closure (either settled or dismissed) is 867 days and the median duration from the lawsuit filing to PIPE issuance is 940 days.6 In addition to trading based on their hedging incentives, institutional investors may also act as information producers in equity offerings. Several studies on private equity offerings issued by public firms show that hedge funds trade on their information advantage(Bengtsson et al, 2014;Berkman et al, 2017).…”