00Thaler_FM i-xxvi.qxd

MISPRICING IN TECH STOCK CARVE-OUTS 163

Table 4.9

IPO Day Returns for Entire Carve-out Sample

Subsidiary Parent

Offer Closing Percentage Pre-IPO Closing Percentage

Price Price Change Price Price Change

HP/Agilent 30.00 42.75 43 78.00 94.31 21
Odetics/ATL 11.00 11.88 8 19.63 18.25 − 7
Eaton/Axcelis 22.00 23.94 9 69.50 69.50 0
Viacom/
Blockbuster 15.00 15.00 0 40.56 39.94 − 2
Cabot Corp/
Cabot Micro 20.00 24.88 24 29.50 28.00 − 5
Cincinnati
Bell/Convergys 15.00 16.63 11 29.75 28.69 − 4
GM/Delphi 17.00 18.63 10 87.06 85.94 − 1
Deluxe/Efunds 13.00 12.00 − 8 23.88 23.31 − 2
AT&T/Lucent 27.00 30.63 13 64.13 62.88 − 2
Santa Fe/
Monterey 14.50 16.50 14 14.75 15.00 2
Sea Containers/
Orient Express 19.00 19.75 4 28.13 26.25 − 7
HNC/Retek 15.00 32.56 117 61.00 60.88 0
Tridex/TransAct 8.50 8.75 3 10.44 10.63 2
Metamor/Xpedior 19.00 26.00 37 33.19 29.00 − 13
Average for 14
subsidiaries with
positive stub on
first day 20 − 1
3Com/Palm 38.00 95.06 150 104.13 81.81 − 21
Daisytek/PFSWeb 17.00 44.13 160 22.63 21.94 − 3
Methode/Stratos 21.00 34.13 63 43.94 41.88 − 5
Creative/UBID 15.00 48.00 220 35.25 26.25 − 26
Average for four
subsidiaries with
negative stub
on first day 148 − 14
t-statistic for difference
in means, 14
carve-outs vs. four
carve-outs 5.69 2.61
Note.Daily closing prices are taken from CRSP. Pre-IPO price is the price of the
parent on the day previous to the IPO.