Abstract

http://ssrn.com/abstract=1018242
 
 

References (13)



 
 

Citations (5)



 


 



Blank Check IPOs: A Home Run for Management


Vijay M. Jog


Carleton University - Eric Sprott School of Business

Chengye Sun


Carleton University

August 2007


Abstract:     
In the last four years, sixty-two blank check companies have raised $4 billion dollars with their IPOs. According to the SEC definition, a Blank Check company is a development stage company that has no specific business plan or purpose, or has indicated that its business plan is to engage in a merger or acquisition with an unidentified company or companies, other entity, or person. These companies typically involve speculative investments and often fall within the SEC's definition of "penny stocks" or are considered microcap stocks" even though some of these companies raise more money than a typical standard IPO. In this paper, we document various aspects of these companies and IPOs and analyse the returns earned by shareholders and management, from their issuance date to the post-acquisition date. Our results show that the shareholders of blank check IPOs earned minus 3% annualised abnormal returns, whereas management earned approximately 1900 percent annualised return. It looks like the investors essentially wrote a blank check to management.

Number of Pages in PDF File: 31

Keywords: Blank check, IPO, private equity

JEL Classification: E44, D30

working papers series


Download This Paper

Date posted: October 3, 2007  

Suggested Citation

Jog, Vijay M. and Sun, Chengye, Blank Check IPOs: A Home Run for Management (August 2007). Available at SSRN: http://ssrn.com/abstract=1018242 or http://dx.doi.org/10.2139/ssrn.1018242

Contact Information

Vijay M. Jog (Contact Author)
Carleton University - Eric Sprott School of Business ( email )
1125 Colonel By Drive
Ottawa, Ontario K1S SB6
Canada
613-520-2377 (Phone)
613-520-4427 (Fax)
Chengye Sun
Carleton University ( email )
1125 colonel By Drive
Ottawa, Ontario K1S 5B6
Canada
Feedback to SSRN


Paper statistics
Abstract Views: 2,234
Downloads: 598
Download Rank: 23,874
References:  13
Citations:  5

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.421 seconds