Micah Officer is a professor of finance at Loyola Marymount University. His research focuses on corporate finance and corporate governance issues, including capital structure, dividend policy, corporate governance, stockholder voting rights and the contractual features of merger agreements. Micah has published articles in several top-tier finance journals, including the Journal of Financial Economics, Journal of Finance, Journal of Business, and Journal of Corporate Finance. He regularly gives presentations at universities and conferences around the world. Micah is an associate editor of the Journal of Financial Economics, and his paper titled “Inter-firm linkages and the wealth effects of financial distress along the supply chain” (co-authored with M. Hertzel, Z. Li, and K. Rodgers) won the Fama/DFA prize for best capital markets paper published in the Journal of Financial Economics in 2008.
University of Rochester: Ph.D., Finance 2002
University of Rochester: M.S., Applied Economics 1999
University of Auckland: B.C., Finance & Economics 1996
Areas of Expertise (7)
Mergers & Acquisitions
Stockholder Voting Rights
Industry Expertise (3)
Training and Development
The monthly volatility of IPO initial returns is substantial, fluctuates dramatically over time, and is considerably larger during “hot” IPO markets. Consistent with IPO theory, the volatility of initial returns is higher for firms that are more difficult to value because of higher information asymmetry. Our findings highlight underwriters’ difficulty in valuing companies characterized by high uncertainty, and raise serious questions about the efficacy of the traditional firm-commitment IPO process. One implication of our results is that alternate mechanisms, such as auctions, could be beneficial for firms that value price discovery over the auxiliary services provided by underwriters
We analyze the pricing and characteristics of club deal leveraged buyouts (LBOs)—those in which two or more private equity partnerships jointly conduct an LBO. Using a comprehensive sample of completed LBOs of U.S. publicly traded targets conducted by prominent private equity firms, we find that target shareholders receive approximately 10% less of pre-bid firm equity value, or roughly 40% lower premiums, in club deals compared to sole-sponsored LBOs. This result is concentrated before 2006 and in target firms with low institutional ownership. These results are robust to controls for target and deal characteristics, including size, Q, measures of risk, and time and industry fixed effects. We find little support for benign motivations for club deals based on capital constraints, diversification motives, or the ability of clubs to obtain favorable debt amounts or prices, but it is possible that the lower pricing of club deals is an inadvertent byproduct of an unobserved benign motivation for club formation.