Why Do Firms Become Widely Held ? An Analysis of the Dynamics of Corporate Ownership

  title={Why Do Firms Become Widely Held ? An Analysis of the Dynamics of Corporate Ownership},
  author={Jean Helwege and CHRISTO PIRINSKY and Ren{\'e} Stulz},
We examine the evolution of insider ownership of IPO firms from 1970 to 2001 to understand how U.S. firms become widely held. A majority of these firms has insider ownership below 20% after ten years. Stock market performance and liquidity play an extremely important role in ownership dynamics. Firms with stocks that are highly valued, are liquid, and have performed well experience large decreases in insider ownership and become widely held. Ownership also falls for low cash flow and high… CONTINUE READING
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