Abstract
This study documents and examines a decrease in the price discounts associated with private investments in public equity (PIPE) issues. PIPE discounts decreased from an average of 16.4 percent during the 1995 to 2000 period to an average of 9.8 percent during the 2001 to 2007 period. This decrease reflects changes in the characteristics of the public firms that are accessing the PIPE markets as well as changes in the pricing of issue characteristics. In addition, part of the decrease is attributable to contracting practices that caused PIPE discounts in recent years to better reflect market conditions on the day that the securities were issued.
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