Mutual to stock conversion, information cost, and thrift performance

Document Type

Article

Publication Date

1-1-1997

Abstract

In the 1980s, a large number of thrifts converted from the mutual to the stock form of ownership. The literature has noted that investors in those conversions earned abnormally high short-term returns. However, over the long run the converters earned very poor returns. The major reason for the poor returns was the extra noninterest operational costs associated with the stock form of ownership. Since those extra operational costs were predictable, the stock offerings may have been overpriced, ex ante as well as ex post. © 1997 Blackwell Publishing Ltd.

Identifier

0008697747 (Scopus)

Publication Title

Financial Review

External Full Text Location

https://doi.org/10.1111/j.1540-6288.1997.tb00438.x

e-ISSN

15406288

ISSN

07328516

First Page

545

Last Page

568

Issue

3

Volume

32

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