The Pricing Of Thrift Conversions

Abstract

This paper aims to explore the conversion of Mutual Thrifts to publicly traded savings institutions.  Equity and fairness are important in the mutual thrift conversion process since these firms leave the general community control and placed in specific investor control.  As a result, an examination of issue size choice (are there variables that show some thrifts were priced low) and underpricing (are there market results that show a thrift was underpriced) are crucial.  We find evidence that the price was chosen in a way to benefit insiders and mutual holding companies.