2001/01/01 by Michael J. Schill, Chunsheng Zhou
Business, Management and Accounting · #Corporate Finance and Governance #Corporate Taxation and Avoidance #Financial Reporting and Valuation Research
paper · doi:10.2307/3666374
crossref issued 2001/01/01 · crossref published 2001/01/01 · crossref published-print 2001/01/01 · openalex publication_date 2001/01/01 · crossref created 2007/03/06 · crossref deposited 2021/02/05 · openalex created_date 2025/10/10 · openalex updated_date 2026/06/11 · crossref indexed 2026/07/24
We examine price behavior in the emerging Internet industry by comparing investor valuation of Internet subsidiary carve-outs with that of the parent. We provide examples of parent firms whose Internet carve-out holdings exceed the market value of the entire parent by a large magnitude and over an extended period of time. We reject alternative tax, liquidity, and agency cost hypotheses previously proposed as explanations of a related phenomenon, the closed-end fund discount. We conclude that investors, or at least an important clientele of investors, value direct Internet asset holdings more richly than indirect holdings via the parent.