Shastri S. Sandy
Ph.D. Candidate in Finance
Research Interest: Empirical corporate finance, corporate governance and interaction between shareholders and the firm
Job Market Paper
|
Does It Matter Who Owns the Stock? pdf
Abstract: I test the Wall Street claim that investment banks place the shares of an equity offering
in the hands of the "right" shareholders. I classify shareholders based on past trading
characteristics. For IPOs where investment banks have discretion over selecting the
firm's shareholder base, I find that investment banks do not satisfy long-term
shareholders' demand for shares. For these IPOs, there is no correlation between initial
shareholder composition and five-year returns following IPOs. In SEOs where investors
select into the firm, I find a significant correlation between shareholder composition
and five-year returns following SEOs. Post-SEO returns are lower if more short-term
investors buy into the equity offering. This evidence suggests that the difference in
post-SEO returns is due to stock selection by investors and not the placement decisions
investment banks make. |
Working Papers
|
Capital structure as a strategic negotiating tool: Evidence from shareholders' class action lawsuits
Abstract: I use a negative exogenous shock to the ability to file shareholder initiated class action lawsuits - the passage of the 1995 Private Securities Litigation Reform Act - to test the effect of the probability of being sued on a firm's capital structure. After the passage of the Act, firms with the highest ex-ante probability of being sued have the largest decline in leverage ratio. The change in leverage is inversely related to the time until the debt matures. These results suggest that managers use their capital structure, specifically their short term debt, strategically as a negotiating tool in shareholder initiated class action lawsuits. |
