Acceso usuarios
We examine how Private Investment in Public Equity (PIPE) contracts allocate contingent cash flow rights between investors and issuers and the role of placement agents in PIPE contract design. Issuers advised by expert agents agree to more investor-friendly terms than issuers advised by nonexpert agents. Expert agents appear to help issuers understand the payoff consequences of negotiable terms. Moreover, expert agents allow issuers to negotiate more attractive pricing when they agree to investor-friendly terms. Issuers earn higher postoffering stock returns when they use expert agents or agree to more investor-friendly terms. These results suggest that the involvement of expert agents is beneficial to PIPE issuers.
