Lanterna Rally

Author: Bradford D. Jordan

Publisher:

Published: 1986

Total Pages: 40

ISBN-13:

This paper examines that stock price performance of savings institutions that have converted to the stock form of organization. Using event-study methodology, the study focuses on the returns to initial shareholders in the period immediately following initial trading. The results of the study indicate that there are significant positive returns in savings institution conversions in the first several trading days, indicating a one-time wealth transfer from depositors not extracting their rights to the initial shareholders. The results also attest to the efficiency of the market as the market price adjusts quickly in the first two days of trading after the public offering.