WORKING PAPERS
Government Procurement Contracts, Persistent Cash Flows, and Long-Term Debt Capacity. (with Arnold R. Cowan)
(Job market paper)
Abstract
This paper investigates how U.S. government procurement awards affect firm cash flows and capital structure. We show that awards generate persistent increases in cash flows, particularly for small firms and those with high transitory cash flow volatility, easing financing frictions and increasing access to long-term debt. The effect is stronger among firms with greater short-term debt reliance and does not extend to subcontractors. Our findings highlight government procurement as a source of positive permanent cash flow shocks that influence firms’ debt maturity choices and capital structure decisions.
Secondary Share Offerings as Governance. (solo)
Abstract
This paper examines the role of secondary share offerings (SSOs)—offerings in which shareholders sell their shares— as signals of financial risk and as governance mechanisms that prompt firm-level changes. About 73% of SSOs follow periods of heightened leverage. Post-offering, issuing firms improve profitability and significantly reduce leverage, particularly when previously over-levered and facing low adjustment costs. Leverage reductions are not explained by ownership or managerial shifts but by operational improvements enhancing debt-servicing capacity. In sum, SSOs are not just indicators of overvaluation; they may reflect financial vulnerability and act as catalysts for improved firm outcomes.
Award
Best Paper Award- Global Finance Conference (2025)
Conference Presentations
2025: Financial Management Association (FMA) Conference
2025: Global Finance Conference (GFC)
Overpricing in Seasoned Equity Offerings. (with Arnold R. Cowan)
Abstract
Twenty-eight percent of seasoned equity offerings (SEOs) in a 2009-2022 sample are overpriced, in that the offer price exceeds the closing trade price on the offer date. We hypothesize that short sellers responding to offer prices above their private estimates of value contribute to secondary market price declines on the SEO date. Consistent with our prediction, offer-date short selling volume is negatively related to offer-to-close returns in overpriced SEOs. The association is not reversed in the following weeks, consistent with the effect of short selling being a function of private information rather than temporary price pressure. Short sellers act as liquidity providers, consistent with their trades being motivated by private estimates of value. Overall, the results highlight the increasing magnitude of overpricing in a subset of recent SEOs and show that short selling on the offer date of an SEO is a factor in overpricing.
Conference Presentations
2025: Southwestern Finance Association (SWFA) Conference
2025: Financial Management Association (FMA) European Conference
2025: Financial Management and Accounting Research Conference (FMARC) (Accepted)
2024: Guest Lecture, Iowa State University. FIN 450 (Analytical Methods in Finance), Instructor: Tracy M. Turner
WORKS IN PROGRESS
• A Portfolio Perspective on Selling Shareholders in Secondary Share Offerings
• Confidentially Marketed Public Offerings (CMPOs) and the Nature of Information in Equity Markets