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1
Kostas, Dimitris. "Initial public offerings on the London Stock Exchange." Thesis, University of Manchester, 2014. https://www.research.manchester.ac.uk/portal/en/theses/initial-public-offerings-on-the-london-stock-exchange(41d0c548-e6c5-4540-878f-3dbbf57688b7).html.
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This thesis examines the non-cash compensation paid to the underwriters/brokers during the flotation process and the IPO when-issued dealing market in one of the most successful and international stock exchanges around the world, the London Stock Exchange (LSE). The thesis consists of three essays that try to answer the following questions: Do IPO firms minimise their costs of going public by issuing warrants to their financial advisers? Does the when-issued dealing affect the setting of the offer price? The first essay examines the issue of warrants to brokers as part of their compensation package in non-underwritten offerings on the Alternative Investment Market of the LSE. The main finding is that IPO firms are able to make efficient decisions and choose the contract that minimises their costs. For companies that issue warrants to their brokers the total costs of going public are 22.74% (as a percentage of gross proceeds), but would have been 25.61% had they not issued them. This 2.87% reduction in costs is equivalent to 70.34% of the commission paid to the brokers by the IPO firms. The main source of this decrease in the costs is the lower underpricing the companies incur by granting warrants to their brokers. The second essay examines the use of non-cash compensation in underwritten IPOs. The findings suggest that firms that are cash constrained are more likely to issue warrants to their underwriters. In addition, underwriters appear to have the ability to time the issue of warrants because they include them as part of their compensation package when the market is doing well. Interestingly, warrant issuers are still able to minimise their costs of going public even under a very light regulatory setting underlying the use of non-cash compensation. The third essay examines the when-issued dealing in the Main Market of the LSE for an extensive period of time, 1996 to 2012. The main finding is that, in an institutional setting in which the when-issued dealing commences only after the allocation of shares and the offer price are announced, investors pay ‘rents’ to the underwriters in order to acquire IPO shares that will trade within the when-issued dealing. These ‘rents’ take the form of a higher offer price. In other words the when-issued dealing affects the setting of the offer price. For companies that have a when issued dealing the offer price is £3.4 but would have been 54% lower (£1.55) had these firms not had a when issued dealing.
2
Vithanage, Kulunu Sathsara. "Three Essays on Multiple Lead Underwriters in IPOS." Thesis, Griffith University, 2017. http://hdl.handle.net/10072/366345.
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The objective of this thesis is to investigate the role of multiple lead underwriter (MLU) syndicates in initial public offerings (IPOs). Despite the increasing tendency among US issuers to employ MLUs to manage their offerings, the role of MLUs has not been widely recognised in the IPO literature. Using a sample of US IPOs from 1999–2012, this thesis explores several roles of MLUs in three related yet distinct empirical essays. In the first empirical essay, we investigate the information production role of underwriters in an MLU syndicate. We find that, compared to SLU-backed IPOs, MLU-backed IPOs contain more informative content in their IPO prospectuses. The level of informative content, which is a proxy for pre-filing the due diligence efforts of lead underwriters, suggests that MLUs produce more information during the pre-filing period. Further, we find that MLUs use a more readable writing style in IPO prospectuses to effectively communicate pre-filing information to investors. We also find that MLUs produce less information during bookbuilding and provide less support for partial adjustment phenomena. Together, our results suggest that MLUs replace the costly process of bookbuilding information production with their extensive pre-filing information production.Thesis (PhD Doctorate)
Doctor of Philosophy (PhD)
Griffith Business School
Griffith Business School
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Vong, Pou Iu. "Underpricing of initial public offerings (IPOS) in the Hong Kong stock market." Thesis, University of Macau, 1994. http://umaclib3.umac.mo/record=b1636786.
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Goergen, Marc G. J. "Ownership, control and performance issues in German and UK IPOs." Thesis, University of Oxford, 1997. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.339898.
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Mangozhe, Gwarega Triumph. "The long-run investment performance of initial public offerings (IPOs) in South Africa." Diss., University of Pretoria, 2010. http://hdl.handle.net/2263/24692.
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This study investigated the long-run investment performance of 411 South African IPOs during the period 1992 to 2007. Consistent with historical studies, no evidence of abnormal performance was found on a calendar-time approach using the Fama- French (1993) three-factor model. While the long-run performance did not differ materially, factors such as financial and industrial industry classifications were found to impact after-market performance of IPO portfolios. It was found that large new company issuances within the Financials and Industrials categories produced abnormal returns, but on a collective basis there was no evidence of abnormal performance. In particular, a positive relationship was found to exist between book-tomarket ratios and IPO performance in the financial and industrial sectors, but there was scant evidence on a collective basis. Market conditions were found to have an impact on IPO performance. In periods of market buoyancy, IPOs performed well and in periods of market distress, IPOs‟ performance suffered. The implications of this study are that investors, in making decisions on whether or not to invest in new issues, should not expect to make superior returns to the market over a five-year period by investing in IPOs. IPO performance after the five-year period was not part of the scope for this study and may form the basis for future studies. CopyrightDissertation (MBA)--University of Pretoria, 2010.
Gordon Institute of Business Science (GIBS)
unrestricted
6
Charalambides, Marios. "Underpricing and the long-run performance of initial public offerings (IPOs) in the U.K." Thesis, Brunel University, 1998. http://bura.brunel.ac.uk/handle/2438/4287.
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The underpricing and long—run underperformance of initial public offerings (IP0s) of common stock are well documented anomalies. The aim of this thesis is to examine why these two anomalies occur. For this purpose we employ a sample of 653 U.K. IPOs listed in the Main Market (official list) and the Unlisted Securities Market (USM) during the period 1984-1992. The thesis has been primarily motivated by the fact that there are not many comprehensive studies examining these anomalies for IPOs in the U.K., particularly with regards to IPOs obtaining a quotation on the official list. We begin the thesis by examining the initial and aftermarket performance of IPOs. In line with previous studies, we find that the IPOs in our sample are underpriced on average by 10.42%. To assess long—run performance after the initial offering we employ the cumulative return and the buy and hold return measures. We compute IPO abnormal returns relative to two market indexes by using three different models: (1) the market—adjusted model, (2) lbbotson's (1975) RATS model and (3) the Fama and French (1993) three factor asset pricing model. We find that new offerings perform poorly in the long—run. A one pound investment in IPOs is worth less than 90 pence after three years. The thesis continuous by investigating the causes of underpricing. We examine the underpricing anomaly from several angles. First, we test the hypothesis that IPOs produce positive short—run returns because of the ex ante uncertainty surrounding their post—issue value. Employing OLS regression analysis, we find the influence of ex ante uncertainty on the level of initial returns to be rather weak. Second, we examine whether issuers intentionally underprice their IPOs in order to signal firm quality. The empirical findings, however, obtained through logit and OLS regression analysis, provide limited evidence in support of this signalling hypothesis. Third, we investigate whether new issues are deliberately underpriced in the IPO premarket. For this purpose we employ the stochastic frontier model pioneered by Aigner et al. (1977). Although we find that IPOs are deliberately underpriced in the premarket, we fail to establish a significant relation between premarket and initial underpricing. Lastly, we evaluate the underwriter price support hypothesis, which posits that the high IPO initial returns are the result of aftermarket inefficiencies. We find, however, on the basis of statistical analysis and Tobit analysis, that this hypothesis cannot explain away positive first day returns. Overall, the results presented in the current thesis point to the conclusion that newly listed firms generate positive returns in the short—run and negative returns in the long— run because they are initially overvalued by optimistic investors.
7
Neupane, S. "Conflicts of interest in IPOs: case of investment banks - a systematic review." Thesis, Cranfield University, 2008. http://dspace.lib.cranfield.ac.uk/handle/1826/12486.
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Since the burst of the internet bubble there is a great deal of interest in the way investment bank prices and allocates initial public offerings (IPOs). The additional scrutiny and spotlight is also because of the dominance of bookbuilding mechanism, which gives complete discretion in terms of allocation and pricing to underwriters, and the huge amount of money left on the table by the issuers, especially during the internet bubble period. Numerous press stories and law suit by investors and issuers alleged conflicts of interest by investment banks at the expense of issuers and investors. On the basis of scoping study we identified five areas to examine conflicts of interest: laddering, spinning, relationship banking, profit sharing allocation and allocation to affiliated funds. The findings of the systematic review show that very limited research has been done on the areas identified. Moreover, there is almost no evidence available to examine the behaviour of investment banks post internet bubble burst. Likewise, very limited evidence is available from countries other than United States. From whatever limited research has been done in these areas there does seem to be enough evidence to suggest that investment banks have been involved in activities that is in conflict with their responsibilities and duties. There is clear evidence of wrong doing by investment banks in US during the internet bubble period by being involved in spinning, laddering and profit sharing allocations. There is not much evidence available at the moment to charge the underwriters of exploiting issuers and investors through the use of affiliated banks, venture capitalists and mutual funds. There is a great need to examine the behaviour of investment banks not only for the sake of the stability of the financial markets but also for the financial intermediaries themselves as unnecessary regulations undermine the efficient operations of financial markets.
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Lüsch, Fredrik. "Aftermarket Performance of Micro-Capitalized Initial Public Offerings." Thesis, Stockholms universitet, Företagsekonomiska institutionen, 2017. http://urn.kb.se/resolve?urn=urn:nbn:se:su:diva-145169.
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The aftermarket stock price performance of micro-capitalized IPOs with penny stock status is an often-neglected subsample in the IPO research literature. As the markets in which these IPOs are often traded are subject to lower listing and disclosure requirements, there is a higher degree of asymmetrical information between issuers and investors than on more regulated exchanges. Another characteristic of micro-capitalized IPOs is the investor base, which is dominated by retail, or irrational, investors, causing the aftermarket trading to be driven by irrational behavior. With this in mind, this paper studies 139 IPOs made on the Swedish fringe marketplace Aktietorget, over the period 2007-2015, and their 15 months’ aftermarket price performance. The study adopts an event time approach to compare the returns on the IPOs to returns on a market index used as benchmark. Using a Student’s t-test and a Wilcoxon signed rank test, there are no conclusive evidence of abnormal returns that would question the Efficient Market Hypothesis. Results from multiple linear regression models, evaluating IPO price performance over a 15-month period, provide evidence for positive hot period and hot industry effects, and negative underpricing and offer price effects. Furthermore, a positive effect of post-issue company market value is evident for 3-, 6- and 12-months aftermarket periods. This paper provides evidence of return predictability of micro-capitalized IPOs using factors surrounding the IPO date, but requests additional evidence from other geographical samples, with precise definitions of normal returns.
9
Läck, Nätter Anton. "Underpricing of Initial Public Offerings : Evidence from the Nordic." Thesis, Uppsala universitet, Nationalekonomiska institutionen, 2019. http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-388804.
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This thesis is an empirical event study that examines the short-run performance of initial public offerings (IPO), known as underpricing and initial return. I argue that literature which only presents equal weights could potentially give the reader a skewed understanding of the width of the concept. By using a new data set of Nordic IPOs during the period 2009-2018, I provide estimates using equal as well as market capitalization weights consistently to give a more nuanced and fair picture. The equally weighted first-day initial return is estimated to be 4.96% and the value weighted first-day initial return is estimated to be 5.32% during the examined time period. Further, the initial return is examined in relation to firm characteristics as well as quarterly index returns and issuance volume. No statistically significant characteristics that can identify additional levels of underpricing was found. Quarterly average initial returns and quarterly index returns are independent of each other. In line with previous literature the positive relationship of issuance volume and initial return is valid on a quarterly level, indicating that firms tend to go public in times of positive and higher initial returns to a greater extent.
10
Henricson, Tobias. "Underpricing in the Swedish IPO market : Can investors earn abnormal returns by investing in IPOs?" Thesis, Högskolan i Jönköping, Internationella Handelshögskolan, 2012. http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-18404.
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This thesis examines underpricing in Sweden using unique data on the 185 firms going public through initial public offerings (IPOs) and listing on the Stockholm Stock Exchange between 1994-2011. The average initial return in the Swedish IPO market adjusted for index movements is 11.49% but underpricing of individual IPOs was as high as 241.04%. Further, time trends in underpricing, the level of average initial returns effect on IPO supply underpricing and differences between sectors, segments and investment banks are examined. Finally, it is argued that investors must be rewarded for taking the high risk associated with IPO investing and that the average initial return of 11.49% is a reasonable compensation for that risk.
11
Tremonte, Marco. "IPO mittels Auktionsverfahren : Alternative zum Bookbuilding bei Initial Public Offerings /." Zürich : Versus, 2009. http://bvbr.bib-bvb.de:8991/F?func=service&doc_library=BVB01&doc_number=017060516&line_number=0001&func_code=DB_RECORDS&service_type=MEDIA.
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Alm, Emelie, Elin Berglund, and Andreas Falk. "Initial Public Offerings : An investigation of IPO's on the swedish market." Thesis, Jönköping University, JIBS, Accounting and Finance, 2009. http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-11493.
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When a firm decides to go public, two abnormalities often occur. The first is called underpricing and can be defined as a capital loss made by the company the first day of trade due to that the offer price is lower than the closing price after the first day of trade. The increase in stock value is equal to capital the issuing firm could have gained initially; this capital loss is referred to as the “money left on the table”. The second abnormality, underperformance, is a result from underpricing. It means that the stocks that were underpriced the first day also tend to underperform 3-5 years after the initial public offering (IPO) compared to competitors within the same industry.
These two abnormalities together constitutes a problem for the firm because they loose money. However it also enables investors to make a quick profit. There are many studies covering this area, however mostly made by Americans, therefore the aim of this report is to investigate whether the two abnormalities exist on the Swedish market.
In order to fulfill the purpose, companies that were listed 1998-2007 were investigated. Their stock performance is analyzed both on the day of IPO, where we found that 51% of the companies listed were underpriced, with an average of 23%. Further, the average “money left on the table” per company was 3.9 MSEK. The stock prices have also been analyzed on a one- as well as a five year period after the IPO in order to analyze the long-run performance and later compare it to the rest of the industry as well as industry index. We found that most of the companies that where underpriced also tend to follow underperformance. However, how long they underperform depends in which industry they operate. The IT industry, for example had a negative performance after 5 years whereas the Industrials industry has the turning-point from negative performance before 5 years.
13
Zhang, Lei. "An empirical study of unit IPOS in the UK : why do firms include warrants in initial public offerings?" Thesis, University of Birmingham, 2010. http://etheses.bham.ac.uk//id/eprint/1238/.
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The main objective of this thesis is to identify the reasons why firms choose to issue unit IPOs instead of share-only IPOs. Evidence is found that unit firms are smaller, riskier, with higher level of agency costs and higher levels of information asymmetry than share-only firms and unit IPOs are underwritten by less reputable underwriters. The initial return results provide strong support to the Agency Cost hypothesis that unit IPOs is significantly more underpriced than share-only IPOs. Unit firms have lower survival rate than that of share-only IPO firms; however, unit firms that do survive are more likely to issue seasoned equity offerings (SEOs) for further funding. A clear pattern of price run-up is observed before SEO announcements by unit firms and a significant negative price adjustment is found when the SEOs are announced. In the long-term, this thesis provides evidence that unit IPOs present significantly worse underperformance comparing to both the matching share-only IPOs and various market indices. Such results contradict both the Agency Cost and the Signalling hypotheses and imply that unit firms cannot significantly improve performance by simply attaching warrants, regardless as whether they are used to reduce agency costs or to signal firm value.
14
Uzonwanne, Nnamdi John. "Firm and industry characteristics, long-term returns and survival of Initial Public Offerings (IPOs) : a critical re-evaluation." Thesis, University of Leeds, 2013. http://etheses.whiterose.ac.uk/5854/.
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This study tracks IPOs from the time of their entry into the public domain up to at least six years post-listing. In the first part of this study, the post-listing performance of these firms relative to that of a set of control firms in event and calendar time is evaluated, using a fresh sample of 746 IPOs in the UK market over the period 1999-2006 and stepwise matching algorithms that select the matching firms from the general population on the basis of key firm risk factors that includes three new factors – pre-IPO performance, turnover growth and earnings yield – employing a refined matching technique and a battery of methods. Given that the majority of the studies in the literature find that IPOs are poor investments in the long-term, the findings in the first part suggest firstly, that investing in IPOs beyond the immediate after-market may not be a bad trading strategy since the relative after-market performance is dependent on the proportions in which the stocks are stacked in the investor’s portfolio; secondly, value-weighted performance does not provide strong evidence against market efficiency when compared to an equally-weighted measure of abnormal performance [which tends to suggest that the former may provide a more useful benchmark in assessing the post-event risk-adjusted performance of IPO firms since it more accurately captures the investors’ wealth effects] and; thirdly, the under-performance of new issues of common stock remains an anomaly that really challenges the efficient market hypothesis only when performance is equally-weighted. In the course of analysing the performance of the firms in the first part, this work finds that the under-performance is more prevalent in some groups of IPOs than others. Hence, in the second part of the work, the economic importance and significance of key firm and industry risk factors prior to or at the IPO that may predict or explain this under-performance is tested. The author’s findings reveal that industry risk factors of IPO surplus value, profitability, market-to-book and equity volatility in addition to firm risk factors of size, market-to-book, past performance, underwriter reputation and the ‘hot’ IPO market can help distinguish the best performing from the worst performing firms. More importantly, the industry effects here are economically large and are first documented in this study. In the third and final part of the work, the firms are tracked in event and calendar time, equally using only that information that is available prior to or at the IPO. The author’s findings reveal that industry risk factors of IPO surplus value and profitability in addition to firm risk factors of size, past performance, initial market return volatility [IPO risk], underwriter prestige and the ‘hot’ IPO market can foreshadow an IPO’s survival. More importantly, the industry effects here are also first documented in this study. More particularly, the evidence here on past performance and underwriter prestige is strong and overwhelming with the results suggesting that firms desirous of going public should first build a track record of profitable performance, while the latter lays credence to the fact that firms underwritten by prestigious underwriters are less likely to fail. The results also suggest that potential IPO investors, IPO firms and their investment bankers should consider industry risk factors prevailing at the time of the IPO to provide them with additional information on whether or not to invest in the IPO [in the case of the investor] or go ahead with the IPO, or alternatively, withdraw and re-launch at a more auspicious date [in the case of the issuing firm and its investment banker].
15
Chi, Jing. "The performance and characteristics of the Chinese IPO market." Thesis, University of Reading, 2003. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.288749.
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Heffernan, Grant B. "Effect of Lockup Agreements on Buyout Backed Initial Public Offerings." Scholarship @ Claremont, 2011. http://scholarship.claremont.edu/cmc_theses/183.
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Using a sample of 279 buyout backed firms, I examined the effect of lockup agreements on the firm’s stock returns. I found there to be a negative .8 percent cumulative abnormal return for the three-day period surrounding lockup expiration. Consistent with my hypothesis the CAR for the three-day period surrounding lockup expiration was less negative for buyout backed IPOs compared to venture capital backed IPOs. In addition, I found there to be an abnormal 24.24 percent increase in trading volume for the three days surrounding lockup expiration.
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Govindasamy, Prabeshan. "The long run performance of initial public offerings in South Africa." Diss., University of Pretoria, 2010. http://hdl.handle.net/2263/23741.
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The current research was undertaken to determine the long run performance of Initial Public Offerings (IPOs) listed on the Johannesburg Stock Exchange (JSE) in South Africa. The three year abnormal returns were assessed for IPOs listed between 1995 and 2006 comprising a sample of 229. Using the Buy and Hold Abnormal Return (BHAR) and Cumulative Abnormal Return (CAR) methods, it was found that the IPOs underperformed the market by 50% and 47% for BHAR and CAR respectively. The JSE All Share Index was used as a benchmark. The research also investigated the effect of firm size on IPO performance. The relationship between IPO activity and performance was analysed as well as the performance of IPOs from different sectors. Gross proceeds of the offers were used as a proxy for firm size and it was shown that by splitting the sample into different size groups, there were significant differences between the returns from these groups. There was no relationship found between IPO activity and performance using a linear regression. Using an Analysis of Variance (ANOVA) it was determined that there were significant differences between the performance of IPOs in the different sectors of technology, industrials, financials and mining. CopyrightDissertation (MBA)--University of Pretoria, 2011.
Gordon Institute of Business Science (GIBS)
unrestricted
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Shari, Wahidah. "Evaluation of the market performance and survival of initial public offerings (IPOs) and its determinants : evidence from the Malaysian market." Thesis, University of Aberdeen, 2018. http://digitool.abdn.ac.uk:80/webclient/DeliveryManager?pid=240016.
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Ali, Heba Ahmed Abass. "Timing, valuation and post-issue stock performance of the initial public offerings (IPOs) and rights issues in the UK." Thesis, University of Exeter, 2012. http://hdl.handle.net/10036/3584.
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The issuance activity of IPOs and rights issues has shown substantial time-varying fluctuations. These fluctuations are conceptually related to the so-called ‘timing, and ‘hot issues’ markets. This thesis conducts a comprehensive examination of the determinants of timing of IPOs and rights issues in the UK, seeking to inspect and compare the main factors that drive these fluctuations. Specifically, I compare the extent to which the favourable business and economic conditions, bull market timing, investor sentiment, and decreasing adverse selection costs can explain these fluctuations. For IPOs, the overall findings show a strongly and robustly significant evidence in support of adverse selection costs hypothesis. Economic conditions, bull market timing and investor sentiment hypotheses are also important determinants of IPOs timing, but of less significance and robustness. For rights issues, the timing story appears different. The empirical evidence is mostly consistent with the bull market timing hypothesis. Investor sentiment proxy is supported but not robustly consistent across various tests. By contrast, the economic conditions and information asymmetry proxies generally exhibited inconsistent findings. It has been recently posited that equity-issuing firms behaviourally time their offerings to exploit stock mis-valuations and investor over-optimism. If so, this behavioural timing is expected to be reflected in a direct relation between mis-valuation of IPOs and right issues and poor post-issue stock returns. This mis-valuation is examined (i) directly via calculating a ratio of the price to an intrinsic value of the firm (as a proxy for relative overvaluation) and (ii) indirectly via looking at the intensity of equity issuance activity since investor over-optimistism and stock over-valuations are expected to substantially differ between hot and cold issues markets. The findings suggest that both IPOs and rights issues are significantly over-valued compared to other non-issuing firms. More importantly, the post-issue stock returns are found to be significantly and robustly different between IPOs and rights issues launched during hot issues markets compared to those launched during cold and normal issues markets, which strongly supports the behavioural timing hypothesis. However, the overall findings derived based on the post-issue stock returns conditional on relative overvaluation are less consistent with the behavioural timing hypothesis.
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Åkesson, Mathias, and Erik Fäldt. "The Aftermarket Performance of Swedish Initial Public Offerings : A study about short- and long-term performance and underpricing of Initial Public Offerings on the Swedish stock markets." Thesis, Blekinge Tekniska Högskola, Institutionen för industriell ekonomi, 2019. http://urn.kb.se/resolve?urn=urn:nbn:se:bth-18222.
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This thesis examines the performance of IPO firms in the Swedish markets during their first three years of trading to investigate what effects different factors have on the short- and long-term performance. The level of underpricing on Swedish IPOs are also investigated to detect any abnormalities from previous studies on larger markets in the US and Europe. A total of 175 IPO firms included in the sample in the period between 2000 and 2015. The method used to calculate the aftermarket performance is the buy-and-hold abnormal returns method in an event-time portfolio approach. These returns are used as a dependent variable in a multivariable linear regression analysis. The main findings from this study are that IPO firms in the Swedish markets underperform the OMX market index one month and three years after the offering. Conversely, IPO firms in the Swedish markets overperform after 18 months compared to the OMX market index. The results show that Swedish IPOs are on average underpriced and that underpricing has a significant effect on short-term performance. Firm age, offer size and the technology industry also have a significant effect on the first month’s performance of IPO firms; however, there is little support for these factors to affect the longterm performance.
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Thiess, Rolf C. "Corporate governance, professionalisation and performance of IPO firms. The role of founders and venture capitalists." Thesis, University of Bradford, 2010. http://hdl.handle.net/10454/4458.
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Combining agency theory and the resource-dependence perspective as well as signalling
theory, this thesis examines the role venture capitalists (VCs) and founders play with
respect to both structural board characteristics and board capital in terms of experience and
prestige and whether these are linked to performance.
It claims that VCs and founders shape the governance system of the firms going public and
are influential in the professionalisation of the ventures especially in terms of human and
social capital of its board of directors. It also argues that the board of directors represents a
signal of firm quality in the initial public offering (IPO) market and should thus be linked
to performance. Similarly, according to the venture capital certification hypothesis, being
funded by VCs signals a firm¿s quality and potential.
In order to assess these claims, this thesis employs a unique sample of matched venturecapital-
backed and non-venture-capital-backed entrepreneurial IPOs that floated either on
the London Stock Exchange¿s Official List or the Alternative Investment Market (AIM).
Extending previous research this thesis employs more fine-grained measures and introduces
new conceptually relevant variables in the analysis.
The findings indicate that VCs and founders are influential in shaping corporate governance
of IPO-stage ventures both from an agency and resource-provision perspective. Findings
from the examination of governance and professionalisation characteristics with respect to
IPO short-run performance (underpricing) indicate that it may the involvement of
prestigious auditors that signal firm quality while a founder bias discount seems to exist.
While evidence is found that VC involvement (and to a lesser extent director/board
characteristics) is related to post-IPO market performance, this seems to depend on the time
period following the IPO examined, whereas auditor prestige shows a positive association
in all of these time periods.Bradford University School of Management
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Espenlaub, Susanne. "The underpricing of initial public offerings : theory and evidence of IPO signalling." Thesis, University of Oxford, 1996. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.361822.
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Gordon, Sean Anthony Garnet. "Empirical Tests of the Signaling and Monitoring Hypotheses for Initial Public Offerings." Thesis, University of North Texas, 2006. https://digital.library.unt.edu/ark:/67531/metadc5595/.
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The research questions investigated are: 1. Are the expected post-issue fractional holdings of the directors and officers, venture capitalists and institutions signals of firm value? 2. Are the expected post-issue fractional holdings of the directors and officers, venture capitalists and institutions signals of underpricing? and 3. Are the directors and officers, venture capitalists and institutions monitors of IPO investments? The signaling theory developed by Grinblatt and Hwang (1989) (GH) and the monitoring theory for IPO investments have been used to develop the hypotheses for this dissertation. Four factors make my methodology unique. These factors are: 1. I apply and test the GH IPO signaling model over a unique data set collected from the IPO prospectuses, proxy statements and annual reports; 2. I disaggregate the expected post-issue holdings of the different groups of pre-issue blockholders and insiders and hypothesizes that these individual groups represents signals of firm value and underpricing; 3. I hypothesize that these groups, in aggregate and separately, monitor IPO investments over the long term; And 4. I develop signaling and monitoring hypotheses to make predictions at the two stages of the IPO. The results show that firm value is positively related to the level of underpricing, at a given variance of the firms cash flows; the level of underpricing is positively related to the holdings of the directors and officers as a group and the aggregate of the directors and officers, VCs and institutions, at given variances of the firm's cash flows; the firm value is not related to the level of underpricing, at a given level of capital outlay and holdings of either the aggregate blockholders, directors and officers, VCs or institutions. For the monitoring hypotheses, the results show that the long-run buy-and-hold-returns are positively related to the investment bank reputation and the gross spread. Also, the results do not support the theories that the holdings of the VCs, institutions and the aggregate holdings of the different groups, represent the level of monitoring. Therefore, these groups do not increase the value of IPO investments over the long-run.
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SIGNORI, Andrea. "The evalutation of IPOs and its influence on a private firm's exit decision." Doctoral thesis, Università degli studi di Bergamo, 2014. http://hdl.handle.net/10446/30392.
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The current research investigates the valuation of companies going public in different phases of the IPO process, and unveils its implications on a private firm’s exit decision. The first paper focuses on how underwriters select comparable firms when valuing IPOs. We document that they perform a biased, left-truncated selection, as they omit peers with the poorest valuations compared to those selected by sell-side analysts or obtained from matching algorithms. IPOs are priced at a discount compared to peers selected by underwriters, but at a premium with regards to alternatively selected peers, even by considering peers chosen by the same underwriter acting as analyst.
The second paper deals with aftermarket valuation of IPOs, focusing on the relation between the fees paid to underwriters and the services they provide to the issuer, such as price stabilization. We study whether a formal commitment by underwriters to provide ancillary services allows them to charge higher fees, and find that asking underwriters to support aftermarket valuation (i.e., stabilize stock price) is costly to the issuer, while to support liquidity is not. Underwriters stabilize IPOs that really need it, whereas the drivers of the provision of liquidity support are less clear.
The third paper examines how the possibility to go public and be subsequently acquired at a higher valuation alters a private firm’s initial exit trade-off between IPO and acquisition. Firms suffering from greater information asymmetry and more severe financial constraints are more likely to go public before being acquired, rather than be directly acquired as private. These firms receive a higher valuation than that obtained by similar private targets. On the other hand, there are risks associated with two-stage exits. Less successful firms face a higher probability of delisting, with a valuation similar to what they would have obtained by selling out as private.
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Thiess, Rolf Christian. "Corporate governance, professionalisation and performance of IPO firms : the role of founders and venture capitalists." Thesis, University of Bradford, 2010. http://hdl.handle.net/10454/4458.
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Combining agency theory and the resource-dependence perspective as well as signalling theory, this thesis examines the role venture capitalists (VCs) and founders play with respect to both structural board characteristics and board capital in terms of experience and prestige and whether these are linked to performance. It claims that VCs and founders shape the governance system of the firms going public and are influential in the professionalisation of the ventures especially in terms of human and social capital of its board of directors. It also argues that the board of directors represents a signal of firm quality in the initial public offering (IPO) market and should thus be linked to performance. Similarly, according to the venture capital certification hypothesis, being funded by VCs signals a firm's quality and potential. In order to assess these claims, this thesis employs a unique sample of matched venturecapital- backed and non-venture-capital-backed entrepreneurial IPOs that floated either on the London Stock Exchange's Official List or the Alternative Investment Market (AIM). Extending previous research this thesis employs more fine-grained measures and introduces new conceptually relevant variables in the analysis. The findings indicate that VCs and founders are influential in shaping corporate governance of IPO-stage ventures both from an agency and resource-provision perspective. Findings from the examination of governance and professionalisation characteristics with respect to IPO short-run performance (underpricing) indicate that it may the involvement of prestigious auditors that signal firm quality while a founder bias discount seems to exist. While evidence is found that VC involvement (and to a lesser extent director/board characteristics) is related to post-IPO market performance, this seems to depend on the time period following the IPO examined, whereas auditor prestige shows a positive association in all of these time periods.
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Aussenegg, Wolfgang, Pegaret Pichler, and Alex Stomper. "Sticky Prices. IPO Pricing on Nasdaq and the Neuer Markt." SFB Adaptive Information Systems and Modelling in Economics and Management Science, WU Vienna University of Economics and Business, 2002. http://epub.wu.ac.at/1524/1/document.pdf.
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This paper examines the IPO pricing processes of two different markets, each of which employs bookbuilding methods for marketing the IPO shares. For each market we investigate two questions: Does bookbuilding serve mainly as a method for distributing shares, or also as a means for gathering information? And, to what extent do underwriters respond in IPO pricing to any information that they obtain through bookbuilding? We find that a direct comparison of these two markets sheds light on the bookbuilding process in each. For Nasdaq IPOs we find evidence consistent with informational rents being earned by investors for providing information during bookbuilding. On the Neuer Markt there is no such evidence. Instead, we find evidence consistent with rents being paid for information that helps underwriters to set indicative price ranges prior to bookbuilding. The two markets differ further in how underwriters respond to information in pricing IPOs. For the Neuer Markt, this response is severly constrained since underwriters do not set prices above the price ranges. We estimate the total cost of this "restriction" to be approximately one billion Euros for our sample of IPOs. While there are no such apparent restrictions for Nasdaq, we show that also on this market IPO prices are "sticky" in that underwriters respond less to information received later in the pricing process.Series: Working Papers SFB "Adaptive Information Systems and Modelling in Economics and Management Science"
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Khurshed, Arif. "Initial public offerings : an analysis of the post-IPO performance of the UK firms." Thesis, University of Reading, 1999. http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.297620.
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Rajaiya, Harshit. "Three Essays in Corporate and Entrepreneurial Finance:." Thesis, Boston College, 2020. http://hdl.handle.net/2345/bc-ir:108781.
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Thesis advisor: Thomas ChemmanurMy dissertation consists of three chapters. In the first chapter, I analyze the impact of firms' innovation success on their corporate financial policies. I hypothesize that innovation success reduces the information asymmetry facing firms and, through the information channel, affects their capital structure and dividend policies. I measure innovation success using the quantity and quality of patents. I show that firms with higher innovation success face lower information asymmetry, measured using analyst coverage, dispersion, and forecast error. Further, I show that firms with higher innovation success have lower leverage ratios; have a greater propensity to issue equity rather than debt; and have lower dividend payout ratios. I establish causality using instrumental variable analyses with patent examiner leniency as an instrument for patent grants. In the second chapter, co-authored with Thomas Chemmanur, Xuan Tian, and Qianqian Yu, we analyze the impact of trademarks in entrepreneurial firms' success. We hypothesize that trademarks play two economically important roles for entrepreneurial firms: a “protective” role, leading to better product market performance; and an “informational” role, signaling higher firm quality to investors. We develop testable hypotheses based on the above two roles of trademarks, relating the trademarks held by private firms to the characteristics of venture capital (VC) investment in them, their probability of successful exit, their valuations at their initial public offering (IPO) and in the immediate secondary market; institutional investor IPO participation; post-IPO information asymmetry; and post-IPO operating performance. We test these hypotheses using a large and unique dataset of trademarks held by VC-backed private firms. We establish causality using an instrumental variable (IV) analysis using trademark examiner leniency as the instrument. For private firms, we find that the number of trademarks held by the firm is positively related to the total amount invested by VCs and negatively related to the extent of staging by VCs. We show that the number of trademarks held by a firm increases its probability of successful exit (IPOs or acquisitions). Further, for the subsample of VC-backed firms going public, we show that the number of trademarks held by the firm leads to higher IPO and immediate secondary market firm valuations; greater IPO participation by institutional investors; a lower extent of information asymmetry in the equity market post-IPO; and better post-IPO operating performance. In the third chapter, co-authored with Thomas Chemmanur and Jinfei Sheng, we develop testable hypotheses and empirically analyze the effects of outside investors having access to soft information such as online employee ratings from the Glassdoor website on firms' financing and investment policies. We find that higher online employee ratings are associated with larger equity issue announcement effects; a greater propensity to have positive announcement effects and to issue equity rather than debt to raise external financing; higher investment expenditures; greater equity issue participation by institutional investors; and better long-run post-issue operating performance. We establish causality using a difference-in-differences methodology relying on the staggered adoption of anti-SLAPP laws across U.S. states
Thesis (PhD) — Boston College, 2020
Submitted to: Boston College. Carroll School of Management
Discipline: Finance
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Karlsson, Johanna, and Persson Didrik Brinkestam. "The High Risk and High Reward Game : Performance of Venture Capital Backed IPOs." Thesis, Linnéuniversitetet, Institutionen för ekonomistyrning och logistik (ELO), 2021. http://urn.kb.se/resolve?urn=urn:nbn:se:lnu:diva-105689.
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For start-up businesses, the source of outside capital can be retrieved from the venture capital industry. The venture capital industry has grown substantially over the past 50 years, reaching its pinnacle during the internet bubble in the 1990s and serves as an important contributor to the economy. After some time, and optimally when the start-up has matured into a successful business, venture capitalists want to receive money in return for their investments. Most commonly, the exiting of venture capital investments is retrieved through an IPO. An IPO refers to the transition from a private corporation to a public corporation and occurs when a private corporation offers its shares to the public for the first time. The existing literature of IPOs is commonly associated with the depiction of abnormal returns. More precisely, the offer price is often underpriced in comparison to the closing price on the first day of trading. In addition, the returns 1 to 5 years after going public are often subject to subsequent declines (Miller & Riley, 1987; Ritter, 1998). A part of the underperformance of IPOs is anchored in the type of capital structure, venture capital. Thus, this study examines the relationship between venture capital backed IPOs and IPO performance. Furthermore, the relationship between the degree of venture capital, the amount of capital held by the venture capital firm in the IPO, and IPO performance are examined in order to discover eventual correlations. Concerning the performed analysis, the study concludes that there is no clear positive relationship between venture capital backing and IPO performance in the short run. However, one could interpret that being a VC-backed IPO can be prosperous for long-term performance since VC has a positive impact on ROA. Regarding the degree of venture capital, it had a negative impact on the ROA, i.e., the level of degree of venture capital does not have a positive impact on the IPO performance.
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Faria, Emerson. "Underpricing of Brazilian Initial Public Offerings : An empirical analysis of the first-day trading performance of the Initial Public Offerings in the Brazilian market between January 2004 and April 2007." Thesis, Umeå University, Umeå School of Business, 2007. http://urn.kb.se/resolve?urn=urn:nbn:se:umu:diva-1197.
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IPO underpricing is a phenomenon found in all markets worldwide. Investors are always looking for a good opportunity of short-term abnormal positive returns, and the IPOs first-day trading returns have been a good investment strategy for both institutional and private investors in all markets of the world.
This study consists at an investor’s perspective analysis of the first-day returns of 59 IPOs listed on the Brazilian Stock Exchange Market from January 2004 to April 2007, where I have found a significantly mean positive underpricing of 6,60%.
I have found also some evidences of a sprouting “hot-market” period in Brazil, since the number of the IPOs in Brazil has been growing almost in an exponential speed, taking advantage of the constant growing cash inflow and liquidity of the Brazilian market, followed by the high evaluation of the Ibovespa Index, with return of 140% on the study time frame.
When categorizing the study by year, by underwriter (investment bank) and by market segment, I always have found positive adjusted initial returns, which corroborates the fact that underpricing is a constant phenomenon in the Brazilian market.
Other important facts that were identified in this study is that the average returns of the IPOs are decreasing along the years and that companies that depend to a large extent on their human capital and are in the business areas that are staff intensive have a high level of underpricing while companies that have a high level of fixed assets have a low level of underpricing.
Finally, after performing a multivariate linear regression analysis with the chosen independent variables on the full sample and some categorized samples, the results did not have enough statistical significance and consistence that could make them useful to create a statistical model to explain the underpricing level of Brazilian IPOs between January 2004 and April 2007.
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Chandran, Sangeeth. "Liquidity levels and the long-run performance of initial public offerings in South Africa." Diss., University of Pretoria, 2011. http://hdl.handle.net/2263/25806.
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This study investigated the impact of the levels of liquidity of Initial Public Offering (IPO) stocks on the long-run performance of IPOs over a five year period. In addition the study sought to investigate if the levels of liquidity of IPO stock were significantly higher than non-IPO stock. The methodology used was the calendar time portfolio approach based on the Fama-French regression equation. The study found that over a five year period IPOs did not underperform or over-perform the market. In addition the study found that the liquidity levels of IPOs were not significantly higher than non-IPOs. While the lower liquidity levels help explain the fact that the IPOs did not underperform the market, they do not indicate the existence of a liquidity risk premium on the Johannesburg Stock Exchange (JSE).Dissertation (MBA)--University of Pretoria, 2011.
Gordon Institute of Business Science (GIBS)
unrestricted
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McPherson, Jason Scott. "Factors affecting the underpricing of junior mining initial public offerings in a “hot issue” market." Diss., University of Pretoria, 2011. http://hdl.handle.net/2263/26514.
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The pricing of Initial Public Offerings (IPOs) is an area of interest to practitioners and academics alike given the empirical regularity of investors in IPOs making very large first day returns. These first day returns are as a result of share underpricing. Academics have explained the underpricing phenomenon in terms of ex ante uncertainty, namely the risk of pricing, off take and issuing of such shares. In an attempt to predict the degree of the phenomenon much work has been done in linking underpricing to company, issue and market related factors that are known prior to the listing (ex ante as opposed to ex post information). In the case of junior mining companies, underpricing is exacerbated by a lack of financial information making these issues difficult to value since such unseasoned companies have no past earnings history on which to base predictions of future earnings. Given this context, this study identified relevant factors from secondary sources which could be used to proxy the level of ex ante uncertainty and therefore correlate with the degree of underpricing. The analysis firstly sought to ensure that underpricing exists for the issues, market and time period of interest. Secondly the presence of a “hot issue” period (Ritter, 1984), which is exclusive to the natural resources sector, was investigated. Finally the relationship between underpricing and the relevant factors was explored using hypothesis testing about means and regression analysis. It was found that underpricing does indeed exist for junior mining listings on the Toronto Venture Exchange (TSX-V) between 2005-2007. This said no evidence of the “hot issue” period could be found. In terms of linking company, issue and market related factors to the degree of underpricing this study failed to identify any significant predictors. It is argued that junior mining listings on the TSX-V may be a special case since some of these factors have successfully been used, by other researchers, to predict the degree of underpricing of mining IPOs. The fact that junior mining IPO’s listed on the TSX-V show a constant degree of underpricing over time implies that investors do not build market specific factors (market sentiment and commodity price) into the listing price. Rather investors seem to demand a constant degree of underpricing regardless of the market situation to compensate them for the “unknown” exploration risk.Dissertation (MBA)--University of Pretoria, 2011.
Gordon Institute of Business Science (GIBS)
unrestricted
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Goot, Tjalling van der. "Valuing new issues : information quality of initial public offerings at the Amsterdam Stock Exchange /." Amsterdam : Thesis Publishers, 1997. http://www.loc.gov/catdir/enhancements/fy0630/98206588-d.html.
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Abdulai, Mohammed Sani. "Valuation, Pricing, and Performance of Initial Public Offerings on the Ghana Stock Exchange." ScholarWorks, 2015. https://scholarworks.waldenu.edu/dissertations/389.
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In recent years, the initial public offerings (IPOs) on the Ghana Stock Exchange (GSE) witnessed some level of undersubscriptions. The purpose of this research was to investigate the extent to which valuation, pricing, and performance of prior IPOs listed on the GSE contributed to this state of undersubscriptions. The research was informed by the valuation and pricing framework of Roosenboom. The research questions addressed whether IPOs on the GSE were under/overpriced and whether the projected and pre-issue financials were free from forecasting errors and earnings management. A cross-sectional, explanatory research design was employed to examine a dataset of 30 sampled IPOs. The dataset, obtained from IPO prospectuses, trading data, and financial statements, was analyzed using both logistic and multiple regressions. IPO valuation methods, first-day returns (R(1st day)), absolute forecast errors (AFE), and discretionary current accruals (DCA) served as dependent variables and firm characteristics of size, age, profitability, dividends, price-to-value (P/V) ratios, owner-manager, and auditors' reputation served as independent variables. Results revealed that firm characteristics were not significant predictors of the choice of IPO valuation methods, IPOs were underpriced and their R(1st day) were significantly predicted by P/V ratios, the financial projections were over forecasted and their AFE were not predicted by the independent variables, and the pre-IPO financials experienced earnings management and their DCA were significantly explained by the owner-manager variable. This research contributes to positive social change by assisting regulators, investment bankers, corporations, and institutional investors in improving their respective roles in the valuation and pricing of IPOs on the GSE, thus reducing the observed IPO undersubscriptions in the stock market.
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Chahine, Salim, Johnathan D. Arthurs, Igor Filatotchev, and Robert E. Hoskisson. "The effects of venture capital syndicate diversity on earnings management and performance of IPOs in the US and UK: An institutional perspective." Elsevier, 2012. http://epub.wu.ac.at/3486/1/JCF_CORFIN%2DD%2D11%2D00041_RR1_Final_25_Oct_2011.pdf.
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This study examines the extent to which principal-principal agency conflicts within venture capital (VC) syndicates lead to additional principal-agent conflicts in IPO firms in two institutional contexts. Using a matched sample of 274 VC-backed IPOs in the US and the UK, it shows that the diversity of a VC syndicate increases pre-IPO discretionary current accruals, used as a proxy for earnings management, but the impact of such diversity is higher in the US. There
is also evidence of higher underpricing and lower aftermarket performance in firms with higher
earnings management and VC diversity, and these negative performance effects are also higher in the US. Our findings indicate that local and informal institutions have a significant effect on multiple agency conflicts in IPO firms and performance outcomes.
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Eriksson, Jens, and Carl Geijer. "Why are IPOs still attractive : A comparison between going public or staying private." Thesis, Jönköping University, JIBS, Accounting and Finance, 2006. http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-421.
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Bakgrund: Under de senaste två åren så har svenska Private Equity-bolag ökat sina investeringar signifikant. Enkelheten i att anskaffa kapital, såväl som billig skuldsättningsgrad har lett till en ökad aktivitet från PE-bolagen genom uppköp av marknadsledande bolag med starkt kassaflöde. Konkurrensen för attraktiva företag som är till salu har ökat nämnvärt, vilket i sin tur har lett till prisökningar på de utsatta bolagen. De högre värderingarna från PE-bolagen påverkar också antalet börsintroduktioner på Stockholmsbörsen. Ett skäl för de allt färre börsintroduktioner kommer av att bolagen har blivit högre värderade av PE-bolagen jämförelsevis med en värdet av en börsintroduktion.
Syfte: Avsikten med denna uppsats är att, från aktieägarens synvinkel, analysera och beskriva de olika skäl som finns för att gör en börsintroduktion istället för att sälja till ett PE-bolag.
Metod: Undersökningen är baserad på att samla och förstå information gällande specifika personers val och motiv med ett kvalitativt synsätt. Urvalet från undersökningen innehåller alla företag som har genomfört en börsintroduktion på Stockholmsbörsen mellan 1 januari 2005 och 1 april 2006. Intervjuerna har genomförts med varje styrelseordförande, i och med att författarna tror att dessa företrädare är de bästa representanterna för aktieägarna. De personer som lät sig intervjuas fick tala fritt, även om de större frågorna var tvungna att följas i kronologisk ordning.
Slutsats: Alla motiv för att genomföra en börsintroduktion kunde ha uppfyllts genom att sälja till ett PE-bolag, förutom motivet om att uppnå likviditet i aktierna. Ett av de attraktiva motiven för likviditet i aktier är att aktieägarna kan välja mellan att minska ägandet, öka ägandet eller bibehålla de nuvarande aktierna. Ett annat attraktivt skäl är att finansiella institutioner normalt ansluter sig som aktieägare, vilket i sin tur ökar trovärdigheten av företaget. Åtta av det tio företagen hade parallella planer längs med arbetet med börsintroduktionen. De flesta av bolagen hade i åtanke att sälja till ett PE-bolag vid eventuellt gynnsamt bud. Dock fanns det inga PE-bolag som bjöd ett tillräckligt bra pris för de individuella bolagen. Antingen så erhöll de dåvarande ägarna ett bättre pris från börsintroduktionen, eller så trodde de återstående ägarna på att börsen i framtiden skulle prestera bättre än PE-bolagens bud. Enligt teorierna har buy-outs fler fördelar jämförelsevis med börsintroduktioner, men de empiriska undersökningarna visar att de två alternativen var likvärdiga. Den enda fördelen med en eventuell buy-out var att det skulle begära mindre eller samma arbetsbelastning i termer av förberedelser. Dock så ansågs en börsintroduktion vara dyr såväl som att den tar energi och fokus från ledningen.
Background: During the last two years, Swedish Private Equity (PE) companies have increased their investments significantly. Easy access to capital, as well as inexpensive leverage, has led to an increase in activity of PE buy-outs of market leaders with strong cash flow. The competition for objects that are for sale has amplified, which has resulted in price increases of the objects. The higher prices offered by the PE companies also affects the number of initial public offerings (IPO) on the Stockholm Stock Exchange. One reason for the small number of current IPOs is that the objects simply have been valued higher by PE companies than they would do in an IPO.
Purpose: The purpose with this thesis is, from a shareholder’s point of view, to analyze and describe the reasons of making an IPO instead of selling to a PE company.
Methodology: Since the research is based on gathering and understanding information regarding specific persons’ choices and motives, a qualitative approach has been conducted. The research sample contains of all companies that made an IPO on the Stockholm Stock Exchange between 1 January 2005 and 1 April 2006. Interviews have been made with each company’s Chairman of the Board of Directors, since the authors believe that these individuals are the ultimate shareholder rep-resentatives. The interviewees were allowed to speak freely, even though the major questions had to be followed in a chronological order.
Conclusion: All the main motives of the IPO could have been achieved by selling to PE company, except the motive of attaining share liquidity. One of the attractive reasons for share liquidity is that shareholders easily can choose between reducing ownership, increasing ownership or remain with existing shares. Another attractive reason is that financial institutions normally become share-holders, which in turn increases the credibility of the company. Eight out of the ten companies had parallel plans to the IPO; most of them including a possible PE buy-out scenario. However, no PE company offered a price high enough for the individual companies. Either the existing owners received a better IPO price, or the remaining owners believed that the stock exchange would out-perform the PE price offers in the long-run. Theory means that buy-out has got its advantages compared to IPO, but the empirical findings show that the alternatives were on the contrary quite similar. The single advantage with a possible buy-out was that it would demand less, or at most equal, work load in terms of preparation before the sale. However, the negative part with the IPO was that it was considered expensive as well as it took energy and distraction of focus it took from the management team.
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Navarro, Filho Danilo Mattes. "Determinantes da performance de longo prazo de IPOs no mercado brasileiro." reponame:Biblioteca Digital de Teses e Dissertações da UFRGS, 2016. http://hdl.handle.net/10183/149455.
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Estudos recentes, realizados principalmente no mercado norte-americano, trazem in-dícios de fatores determinantes para o resultado de longo prazo das emissões primá-rias de ações (IPOs, do inglês Initial Public Offerings). Porém, trabalhos com esse enfoque no mercado brasileiro ainda são escassos e inconclusivos, pois utilizam pe-quenas bases de dados e analisam horizontes de tempo de até dois anos. Buscando ampliar a análise de IPOs no mercado brasileiro, o objetivo desta dissertação foi es-tudar os determinantes do desempenho de longo prazo das IPOs realizadas na Bolsa de Valores de São Paulo com horizontes de tempo de três e cinco anos após o pri-meiro dia de negociações. A amostra foi composta por 97 emissões primárias de ações ocorridas entre 2004 e 2012 para o horizonte de três anos e 77 ocorridas entre 2004 e 2010 para o horizonte de cinco anos. O cálculo de retorno de longo prazo seguiu a metodologia de Buy-and-Hold Abnormal Return (BHAR), ajustado ao Ibo-vespa, e os possíveis determinantes do BHAR das IPOs foram submetidos a análises multivariadas através de estimações pelo método de Mínimos Quadrados Ordinários (MQO). Os resultados levam à conclusão de que o desempenho de longo prazo das IPOs brasileiras está positivamente relacionado com: 1) a Idade das firmas, 2) o nível de Governança Corporativa, 3) o Setor e 4) o Desempenho Operacional pós IPO. Pôde-se concluir, também, que o desempenho de longo prazo das IPOs está negati-vamente relacionado com: 1) o Retorno Anormal do Primeiro Dia de negociações, 2) a Quantidade de IPOs realizadas no Ano e 3) o Percentual de Investidores Institucio-nais na emissão primária. Os testes de robustez realizados apontam para uma relação também positiva entre o Crescimento do PIB do período pré IPO com o resultado de longo prazo das ações.Recent studies, conducted mainly in the North American market, have presented evi-dence regarding decisive factors for the long-run performance of Initial Public Offerings (IPOs). However, the number of similar studies applied in the Brazilian market is yet limited and inconclusive, because they employ reduced databases and short time win-dows up to two years. Seeking to extend the analysis of IPOs in the Brazilian market, the purpose of this study was to explore the determinants of the long-run performance of IPOs held at BM&F Bovespa, with time windows of three and five years after the first trading day. The sample was composed of 97 initial public offerings occurred be-tween 2004 and 2012 for three-year horizon and 77 occurred between 2004 and 2010 for the five-year horizon. The long-run return calculation followed the methodology of Buy-and-Hold Abnormal Return (BHAR), adjusted to the Ibovespa index, and the pos-sible determinants of BHAR related to IPOs were subjected to multivariate analysis using Ordinary Least Squares (OLS) approach. The results lead to the conclusion that the long-run performance of Brazilian’s IPOs is positively related with: 1) Age of the Firms, 2) the level of Corporate Governance, 3) Sector and 4) post IPO Operating Performance. In addition, it was noticed that the long-run performance of IPOs is neg-atively related with: 1) the Abnormal Return of the First Trading Day, 2) the IPO amount held in the year and 3) percentage of Institutional Investors the IPO. Robustness tests were performed, and their conclusions highlighted a positive relationship between GDP growth of previous IPO period with the long-run performance.
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Söderberg, Fredric, and Fredrik Svensson. "Underprissättning av IPOs : En kvantitativ jämförelse mellan svenska börslistor." Thesis, Södertörns högskola, Företagsekonomi, 2019. http://urn.kb.se/resolve?urn=urn:nbn:se:sh:diva-38407.
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Att göra en rättvis prissättning av aktier vid en börsintroduktion kan vara svårt och det är i företagens, emissionsinstitutens och investerarnas intresse att detta sker. Rådande informationsasymmetri leder ofta till att aktier underprissätts för att locka investerare att delta vid en börsintroduktion. Syftet med denna uppsats är att undersöka skillnader i aktiekursens utveckling den första handelsdagen på de officiella och de inofficiella börslistorna för att se om varierande krav på informationsutgivning och marknadsvärde har en påverkande faktor. De officiella börslistorna som undersöks är Nasdaq Small, Mid och Large Cap, medan de inofficiella börslistorna är First North och Spotlight. Undersökningens resultat visar att företagens marknadsvärde inte har en betydande påverkan på aktiekursutvecklingen den första handelsdagen då samtliga börslistor på Nasdaq hade en liknande utveckling samt andel underprissatta aktier. Detta trots att kravet på marknadsvärde för att noteras på dessa börslistor skiljer sig markant. De olika börslistornas krav gällande informationsutgivning har visat sig ha en betydande påverkan på aktiekursutvecklingen. Resultatet visar även att inofficiella börslistor har en större spridning av aktiekursutvecklingar där det förekom mycket höga under- och överprissättningar. Detta innebär att investerare som deltar vid en börsintroduktion på First North och Spotlight tar högre risk samt har möjlighet till högre avkastning.Pricing shares for an upcoming IPO can be difficult and it is in the companies’, theInvestment Bank’s and investor’s interest that the shares are fairly priced. The current information asymmetry often results in companies underpricing their shares to attract investors to participate in an upcoming IPO. The purpose of this paper is to analyze the difference in share performance on the first trading day between different stock lists on the Swedish IPO market. This is done in order to see if the different listing requirements, such as information publishing and market capitalization, are important factors for the underpricing of shares. The different stock lists that have been analyzed are Small, Mid and Large Capfrom Nasdaq OMX Stockholm which are all official stock lists, as well as the Multilateral Trading Facilities (MTF) First North and Spotlight. The result of this study shows that market capitalization doesn’t affect the pricing of shares for upcoming IPOs. This because there was minor differences between the different official stock lists Small, Mid and Large Cap, eventhough the required market capitalization to get listed are very different. The different requirements regarding information publishing however, have shown leads to more inaccurately priced shares. The result shows that MTFs’ such as First North and Spotlight experience a wider range of pricing where the average under- and overpricing är very high.This means a higher risk for the investor, but also the potential for higher returns.
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Bui, Thi Mai Anh, and Alessandra Frongillo. "How does the market perceive ESG in IPOs : Investigating how ESG factors affect IPO Underpricing in the U.S. market." Thesis, Umeå universitet, Företagsekonomi, 2020. http://urn.kb.se/resolve?urn=urn:nbn:se:umu:diva-172446.
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Environmental, Social and Governance (ESG) integration in financial activities is a crucial topic that is gaining importance in financial markets. During the years, many studies have been conducted about Initial Public Offering (IPO) and underpricing since they are fundamental aspects of firms’ lifecycle. Nevertheless, none of these studies have appropriately related firms’ ESG characteristics to IPO underpricing. In order to fill this knowledge gap, this thesis’s purpose is to investigate whether the ESG factors of a firm have effects on its IPO underpricing in the U.S stock market. The U.S has been chosen as it is the biggest stock market in the world and because of the quality and reliability of the data available for this country. A quantitative study is applied to investigate the relationship between ESG characteristics of the firms and the level of underpricing. First, to obtain the measurement of the ESG level of the pre-IPO firms, we have conducted two textual analysis of IPO prospectus, namely, term frequency and sentiment analysis. These indicators aim to show the disclosure level of ESG factors and whenever ESG is perceived negatively or positively by the market. Successively, the multiple regression is performed for each ESG indicator to find which measures have the analytical abilities to explain IPO underpricing. Based on the multiple regression results, we can conclude that the frequency of environmental & governance terms occurred in IPO prospectus, the negative tone, and the overall sentiment of the environmental context are significantly explaining IPO underpricing. These results have given meaningful answers for our research. The market does not perceive the social factors of a firm in the IPO context. On the other hand, environmental and governance aspects still attract the market’s attention in different ways. The market is concerned about the disclosure level of the governance activities and whether these activities are sufficiently mentioned in the prospectus. Meanwhile, the market takes into serious consideration the environmental activities of a firm by assessing the qualities of these activities. Moreover, the market is more sensitive to the negative information about environmental content than positive information in the IPO context. The textual analysis methods applied in this thesis have some limitations. However, this study has the reliability to confirm that some companies’ ESG factors affect IPO underpricing. As a consequence, it is possible to state that the market cares about ESG issues.
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Pindroch, Michal. "Underpricing and the Long-Run Underperformance of IPOs." Master's thesis, Vysoká škola ekonomická v Praze, 2011. http://www.nusl.cz/ntk/nusl-71977.
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When companies go public, the shares they sell tend to be underpriced, and thus exhibit a significant price jump on the first day of trading. As a result, IPO investors materialize significant first-day returns. In the long-run, however, relative to some benchmark, investors appear to lose out by continuing to hold the stocks of firms that have recently gone public. These IPO phenomena are subject of the following study. The thesis addresses two main objectives. First, it systematically surveys relevant empirical evidence and theories that have been proposed to explain IPO underpricing and long-run underperformance. In addition, both anomalies are studied form the viewpoints of two competing finance theories: efficient market hypothesis and behavioral finance. Theories of underpricing are grouped within two broad categories: asymmetric information based models and behavioral theories. While asymmetric information based models assume that one of the IPO transaction parties knows more than others, and that these information frictions give rise to underpricing, behavioral explanations, on the other hand, assume the presence of irrational investors who are the prime cause of underpricing. Theories of poor long-term performance are based on behavioral finance perspective only, where "investor sentiment" plays the main role. On the contrary, proponents of market efficiency strongly argue that the notion of systematic IPOs long-run underperformance is spurious. Secondly, the thesis empirically examines the presence of underpricing and the long-performance of IPOs in European NYSE Euronext markets. In general, the results undoubtedly show that IPOs in the sample are moderately underpriced on average. However, the assessment of IPOs long-run performance provides contentious findings and probably requires further research.
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Westgren, Jakob, and Markus Sandsjö. "IPO Underpricing – Can it be predicted? : A quantitative research study of Swedish IPOs 1997-2011." Thesis, Internationella Handelshögskolan, Högskolan i Jönköping, IHH, Företagsekonomi, 2012. http://urn.kb.se/resolve?urn=urn:nbn:se:hj:diva-18327.
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When a company sells shares of their business to the public for the first time, it is called an Initial Public Offering, IPO. The IPO is usually conducted by the issuing firm to raise capital for their future growth. Before the IPO the information about the issuing company is often limited and the investment in an IPO is associated with risks. The investors who choose to invest in an IPO are therefore usually compensated with a discount on the shares and often experience a first day positive return. This first day positive return is the definition of underpricing. If the majority of the IPOs are underpriced it should be of interest for an investor to take part of this opportunity and use it as an investment strategy. This thesis investigates if there is a way to predict which IPOs that will generate a positive first day return based on the information in the IPO prospect.En IPO är det första erbjudandet av företagets aktier till den publika marknaden. En IPO genomförs ofta i samband med att företaget behöver ta in nytt kapital för framtida investeringar. Innan ett företag blir publikt är informationsinsynen begränsad vilket medför en risk för den som vill investera i det initiala erbjudandet. Investerarna som väljer att investera i erbjudandet är ofta kompenserade med en rabatt på aktierna och får då ofta en positiv avkastning på första handelsdagen. Denna initiala avkastning definieras som underprissättningen av erbjudandet. Om en majoritet av börsnoteringarna är underprissatta skulle det vara av stort intresse för investerare att upprepande investera i IPOs och ha detta som investeringsstrategi. Den här uppsatsen undersöker om det går att förutspå vilka IPOs som genererar en positiv avkastning första handelsdagen baserat på den informationen som finns att tillgå i IPO prospektet.
Civilekonom-uppsats
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Baptista, Ricardo Fuscaldi de Figueiredo. "Empirical essays on IPOS: the Brazilian case." reponame:Repositório Institucional do FGV, 2011. http://hdl.handle.net/10438/8467.
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The purpose of this study is to empirically analyze the main factors that determine the first-day return and the Flipping activity in Brazilian IPOs, taking into account expected results according to national and international researches. The data base encompasses IPOs that took place between May 2004 and February 2011, summing up to 129 IPOs and approximately R$ 128 billion offering. The first-day return, which means the ‘money left on the table’, was on average 4.6% taking into consideration the issue price, while the Flipping activity totalized R$ 7.2 billion, meaning 5.6% of the offering. The first-day return was analyzed before and after the first trade, and evidences were found supporting (a) the exogenous determination of the issue price, (b) the opening price dependence of prospectus disclosure and of other variables, observable previously to the bookbuilding process, and (c) the cascade behavior of investors in the pricing after the first trade, particularly driven by the underwriter behavior. In regards to the Flipping, it was notorious depending on how much the IPO succeeded, being concentrated in and homogeneous along the first-day, despite the intense negotiation in the first minute. As a general contribution to literature, it was concluded that Information Asymmetry Theory arguments are not sufficient to explain the first-day Underpricing and the Flipping, being necessary arguments based on Behavioral Finance adapted to an intraday perspective.
Este trabalho analisa empiricamente os fatores determinantes do retorno e do ‘Flipping’ no primeiro dia de negociação em IPOs no Brasil, levando em consideração os resultados esperados pela literatura nacional e internacional. A base de dados inclui IPOs realizados entre maio de 2004 e fevereiro de 2011, totalizando 129 IPOs com ofertas primária e/ou secundária e envolvendo em torno de R$ 128 bilhões. O retorno do primeiro dia, que caracteriza o ‘dinheiro deixado na mesa’, foi em média de 4,6% com relação ao preço de emissão, enquanto o ‘Flipping’ totalizou R$ 7,2 bilhões, ou seja, 5,6% da oferta. Para o retorno, analisado antes e depois da abertura, evidenciou-se (a) a determinação exógena do preço de emissão, além da (b) influência no preço de abertura do ‘disclosure’ do prospecto e de outras variáveis observáveis antes do processo de ‘bookbuilding’, como também (c) o comportamento em ‘cascata’ dos investidores na formação de preços após a abertura, particularmente catalisada pela atuação do ‘underwriter’. Já o ‘Flipping’ foi mais proeminente conforme o sucesso do IPO, sendo concentrado no primeiro dia, mas homogêneo ao longo deste, apesar da intensa negociação no primeiro minuto. Como contribuição geral para a literatura, foi constatada a insuficiência dos argumentos baseados na Teoria da Assimetria da Informação na explicação do ‘Underpricing’ e do ‘Flipping’ no primeiro dia, sendo identificada a complementaridade de argumentos baseados em Finanças Comportamentais adaptados para o mercado intradiário
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Pinheiro, Douglas Beserra. "Determinantes e efeitos da estabilização em IPOs no Brasil." reponame:Repositório Institucional do FGV, 2008. http://hdl.handle.net/10438/2258.
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Previous issue date: 2008-02-27T00:00:00ZNormalmente os underwriters recompram ações no mercado secundário dos IPOs coordenados pelos mesmos. O objetivo da recompra é o de postergar ou evitar a queda do valor dos IPOs. As ações recompradas são aquelas provenientes da opção dada pelo emissor ao underwriter para a venda em excesso de até 15% das ações inicialmente ofertadas, opção esta chamada de greenshoe. Esta dissertação analisa os principais determinantes e conseqüências do processo de estabilização de IPOs no Brasil. Os resultados indicam que IPOs estabilizados são aqueles com maior risco inicial de preços, com menor demanda de investidores institucionais nacionais e estrangeiros e que são conduzidos por underwriters de melhor reputação, além disso, o underwriter apreça ex-ante a possibilidade de exercício do greenshoe através da redução da comissão cobrada pela colocação das ações. O greenshoe é normalmente efetivado quando está “no dinheiro”. Quanto aos efeitos no retorno dos IPOs, os resultados indicaram que no Brasil a estabilização, a demanda de investidores institucionais nacionais e estrangeiros e o greenshoe possuem efeito significante nos retornos, efeitos estes que apesar de curto prazo, vão além do período de estabilização, ou seja, após o término das recompras realizadas pelos underwriters. Ademais, após o término da estabilização, o valor das ações dos IPOs em média não caem significativamente, indicando um efeito positivo desta prática no Brasil. Constatou-se também que o nível de preço em que a estabilização é efetuada pelo underwriter, ou seja, se abaixo ou acima do preço líquido de comissão, possui grande poder explicativo sobre o retorno pós-estabilização. Finalmente, o último teste indica que a estabilização de preços é responsável por um terço do underpricing verificado no mercado brasileiro.
Usually underwriters repurchase stocks of their IPOs in the aftermarket, avoiding or postponing the falling of their prices. The issuer gives an option to oversell the IPO up to 15% from the initial offering to the underwriter, then the underwriter can repurchase the stocks when the prices fall below the offer price, giving them back do the issuer. This option is named greenshoe. The aim of this study is to investigate the main causes and results of the stabilization process of Brazilian IPOs. The results show that stabilized IPOs are riskier, have less local and foreign institutional demand and are issued by more reputable underwriters, moreover, the underwriter determine ex-ante the likelihood of exercise of greenshoe, lowering the spread. The greenshoe is usually exercised when is “in the money”. Relating to the effects over the IPOs returns, the study documented that the stabilization, the demand of national and foreign institutional investors and the greenshoe affect significantly the returns, and these effects are maintained even after the end of stabilization, that is, after the end of repurchases of stocks by underwriters. In addition, after the conclusion of stabilization, on average, the IPO value do not fall significantly, indicating the positive effect of stabilization on the Brazilian market as a whole. The level of price of stock repurchases revealed a positive relation with the returns after the stabilization. Finally, the last test indicates that the stabilization account for a third part of observed underpricing.
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Kajerdt, Johan, and Andreas Rydberg. "Betting on the jockey rather than the horse : a study on the determinants of mergers of SPAC IPOs." Thesis, Uppsala universitet, Företagsekonomiska institutionen, 2021. http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-433975.
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Special Purpose Acquisition Companies (SPACs) are public shell entities uniquely constructed to acquire one or more privately held businesses. The transaction's structural characteristics put significant pressure on the management team's capabilities to find a suitable company to acquire within the predetermined time frame. This thesis investigates whether management team characteristics, such as operating experience and gender diversity, increases the likelihood of success in identifying the target company and conducting the merger. Although not statistically significant, the results indicate that SPACs led by “C-suite” operators do not have a higher likelihood of successfully consummating a business combination. Furthermore, our data indicates gender diversity to have a positive impact on acquisition likelihood.Special Purpose Acquisition Companies (SPACs) är publika skalbolag konstruerade enkom i syfte att förvärva ett eller flera privata bolag. Transaktionen lägger stor vikt på ledningens förmåga att identifiera och förvärva en eller flera verksamheter inom en förbestämd tidsram. Studien undersöker huruvida relevanta karaktärsdrag i ledningsgruppen, såsom operationell erfarenhet och skillnader i kön, ökar sannolikheten att identifiera och förvärva dessa bolag. Resultatet av studien påvisar inget samband mellan operationell erfarenhet och ökad sannolikhet för förvärv, men däremot visar sig skillnader i kön inom ledningsgruppen ha en positiv inverkan på sannolikheten för förvärv. Sammantaget är resultaten dock inte statistiskt signifikanta.
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Veselý, Marek. "Initial Public Offering." Master's thesis, Vysoká škola ekonomická v Praze, 2009. http://www.nusl.cz/ntk/nusl-10506.
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Thesis describes initial public offering on the stock markets. There are mentioned basic phases of this process. In this thesis is named pros & cons of this source of financing. Recommends also other ways how to gain capital for own company business acitivities. Thesis is interested about main conditions for successfull "going public". Initial Public Offering of bonds is described too. Practical part of this thesis is concern IPO in the Czech Republic -- historical data, IPO in the past on Prague Stock Exchange, commentary of well-known stock-market analysts, graphs of stock prices in comparison with the main stock index PX.
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Šisl, Marek. "Analýza procesu IPO na příkladu zvolených společností." Master's thesis, Vysoká škola ekonomická v Praze, 2010. http://www.nusl.cz/ntk/nusl-72628.
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This thesis is focused on the issuance of Initial Primary Offerings of shares, with an emphasis on the development of the worldwide IPOs. The first part of the thesis deals with the types of possible sources of financing of the company and the factors that affect their selection. In the next section it shows a characteristic of an IPO from the company's point of view-- a candidate for IPO. In this section are described the motivation and the assumptions of the company undergoing IPO as well as the advantages and disadvantages which the IPO can bring to a company. The following section describes in detail the process of issuing the IPO, it is divided into several main sections and is focused on the Czech market. Further work describes the world development of IPO activity. Here are shown the count and volumes which were carried out in the recent years. Furthermore there is the current status and future trends in the major world markets (the Chinese, the United States and the European). In the final part of the thesis, an analysis of both macro/micro-economic conditions and success of two IPOs, for a Chinese technology company Youku.com Inc. (performed in December 2010) and an American Internet dial-up company Vonage Holding Corp. (implemented in May 2006), is carried out.
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Silva, José Milton Almeida da. "Mercado de capitais brasileiro: discussão sobre a eficácia dos mecanismos de proteção dos acionistas minoritários não qualificados nos processos de IPO (Initial Public Offering) na Bovespa, no período de 2004 a 2007." Pontifícia Universidade Católica de São Paulo, 2009. https://tede2.pucsp.br/handle/handle/1748.
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Previous issue date: 2009-10-05The central goal of this research was to increase the debating about efficacy from rules, legal actions and Corporate governance to protect the non qualified minority shareholders in the Brazilian IPOs (Initial Public Offering) programs. The theme has showed growing interest, because the number of personal investors and the Bovespa s (São Paulo Stock Exchange) IPO market has been in progress strongly. The event study was the methodology used to measure the abnormal returns in the portfolio s samples with between 23 and 98 shares from 106 IPOs going public in 2004-07, using de market price from January, 2004 to June, 2008. Further, four statistic tests were applied to detect if the speculative bubble dynamic affected the Bovespa from January, 1999 to June, 2008. The empiric results from event study evidenced the overpricing phenomenon measured from the offering price to the market price at the end of the first day of trading estimated between 4,80% and 9,26%, and a underpricing phenomenon in the sequel. The cumulative average abnormal returns, ruled out of the first day return, achieved -11,52% at the end of the 6º month, -16,60% at the end of the 12º month and -35,74% at the end of the 24º month, presented a underperfomance phenomenon with economic and statistic significance, widely documented by the academy, specially on the north American capital market. The empiric results from four statistic tests showed, with statistic significance, that speculative bubble dynamic affected the Ibovespa (Index of São Paulo Stock Exchange) in the period from January, 1999 to June, 2008. Thus, evidences were found of the minority shareholders that bought shares in the Bovespa s IPOs programs in the studied period were induced by market anomalies to overpay the share s portfolios. Consequently, the research suggests that actions to improve the rules, legal actions and Corporate governance is necessary to protect of the non qualified minority shareholders in the Brazilian capital market
Esta pesquisa teve como objetivo central ampliar as discussões quanto à eficácia das normas, procedimentos e Governança Corporativa na proteção dos acionistas minoritários não qualificados nos processos de IPO s (Initial Public Offering) ou abertura de capital das companhias no mercado de capitais brasileiro. O tema apresenta importância crescente em face do recente aumento do número de investidores individuais e do forte incremento do mercado de IPO s na Bolsa de Valores de São Paulo (Bovespa). A metodologia empregada foi um estudo de evento para a identificação da presença de retornos anormais em carteiras compostas por uma amostra entre 23 e 98 ações de um total de 106 IPO s realizados na Bovespa entre 2004 e 2007, abrangendo as cotações das ações no período entre janeiro de 2004 e junho de 2008. Também foram realizados quatro testes estatísticos visando detectar indícios da presença da dinâmica de bolha especulativa na Bovespa no período entre janeiro de 1999 e junho de 2008. Os resultados empíricos do estudo de evento demonstraram evidências de sobre-valorização nos preços das ações no primeiro dia de negociação, com retornos anormais entre 4,80% e 9,26%, seguida de significativas quedas nas cotações subseqüentes. Os retornos anormais médios acumulados, excluído o retorno do 1° dia, atingiram -11,52% no final do 6º mês, -16,60% no final do 12º mês e -35,74% no final do 24º mês, evidenciando relevantes perdas de valor das carteiras analisadas no período, tanto em termos econômicos quanto em nível de significância estatística, caracterizando o fenômeno da underperformance, amplamente documentado pela academia, notadamente no mercado de capitais norte-americano. Os resultados dos testes estatísticos demonstraram indícios, com significância estatística, da presença da dinâmica de bolha especulativa na formação do Índice da Bolsa de Valores de São Paulo (Ibovespa) no período entre janeiro de 1999 e junho de 2008. Desse modo, foram encontradas evidências de que os acionistas minoritários que participaram dos processos de IPO s na Bovespa no período estudado foram induzidos, por anomalias de mercado, ao pagamento de valores acima dos preços justos das carteiras de ações. Como conseqüência, a pesquisa sugere a necessidade do aperfeiçoamento dos mecanismos de proteção dos acionistas minoritários não qualificados no mercado de capitais brasileiro
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Sabel, Jimmy, and Xinrong Wu. "The Role of Lockups in Venture Capital Backed IPOs : An empirical study on the London Stock Exchange from 2009 to 2012." Thesis, Umeå universitet, Företagsekonomi, 2014. http://urn.kb.se/resolve?urn=urn:nbn:se:umu:diva-91036.
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There are plenty of things said about the financial industry, an always ongoing debate, to say the least. We have identified a complex situation with three dimensions: Initial public offerings, Venture capital, and Lockup agreements. IPOs are generally difficult to put a price on because the market is not united yet, which creates uncertainties. Venture capital firms invest into startups, often with the incentive of bringing them to an IPO and then make a fast cash out exit. Lockup agreements are contracts that prevent insiders from dumping their shares during a set period in the beginning of the IPO. Additionally, based on the market efficiency theory, a market should always be efficient. But does it play out when these characteristics are affecting each other? The purpose of this research was to investigate whether there are abnormal returns in the financial performance for publicly listed companies on the London Stock Exchange at the end of their lockup period. We sorted on venture capital backed companies and sought to explore differences between VC backed, Non-VC backed firms, and the entire market. The research question for this study is: ‘Does The theoretical aspects of this research’s ontological and epistemological views were set in positivism and objectivism with a deductive approach. The financial performance was key in this research, and it was essential to get ample and appropriate data, therefore a quantitative research method was used with an archival research strategy and explanatory research design. We explored a big research gap in this area after the financial crisis 2008, which made us look at IPOs from 2009 to 2012 with an event window as our time horizon. To answer the research question and fulfill our purpose, four hypotheses were developed with focus on VC backed firms, Non-VC backed firms, the entire market, and one shorter event window. Our results prove that the market efficiency theory does not hold. To answer the research question, we found negative abnormal returns after the lockup expiration date for both Non- VC backed firms and the entire market. However, we were unable to provide a statistically significant result for VC backed firms. There was an extra clear trend during the middle 20 days, and we suggest and encourage to further research with a longer time horizon than [- 20, +20] days.
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Costa, Yngrid Cabral Lima da. "Preferência por assimetria e sentimento do investidor: um estudo do impacto nos retornos do primeiro dia de ipo no mercado acionário brasileiro." Universidade Federal da Paraíba, 2016. http://tede.biblioteca.ufpb.br:8080/handle/tede/8282.
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Coordenação de Aperfeiçoamento de Pessoal de Nível Superior - CAPES
Among the approaches of the area of behavioral finance, the impact of irrational and speculative behavior of investors has drawn attention of researchers in the face of evidence that indicate a possible influence of idiosyncratic asymmetry into the context of investors' perception in their decision-making and, consequently, prices and returns on assets. Sometimes it is not difficult to find situations where optimistic or pessimistic expectations impacting in some way in the financial market. The idiosyncratic asymmetry can be understood as investors' preference for positive asymmetry, contrary to the assumptions of the theory of expected utility. Investor sentiment can be defined quite broadly, however, the underlying issue that sentiment mainly covers how such investors interpret and react to daily events so they can build their beliefs. The initial public offerings (IPO) are those in which the listed companies provide first sale of its stocks. Thus, understanding the way in which the financial market operates can be of great value to assist investors in their perception and their active trading strategy to take into account the impact factors of stock prices and, if it's worth before speculation of possible delay or not your decision making based on the evaluation of the assumed returns and risks when investing in assets in its first day of trading on the stock exchange. Face of this perspective, the objective of this research is to investigate the relationship between the irrationality of investors and returns of the first day of Brazilian companies that made IPO from 2004 to 2014. The sample comprised 106 companies among the 152 who underwent IPO in this interval of eleven years. The research was based on the model developed by Aissia (2014), who also found the influence of idiosyncratic asymmetry and investor sentiment, but in the financial market of France. The method used for the estimation of the proposed model was through regression analysis by ordinary least squares (OLS). The data revealed that one of the research hypothesis was confirmed because it was found that the idiosyncratic asymmetry positively affected returns of the first day of IPO's inherent in the companies in the sample. Furthermore, this study can enrich the discussion of aspects inherent irrationality of investors in decision-making from a peculiarity has not investigated within the Brazilian market, making relationship with the preference for asymmetry itself in order to open new horizons for future studies proposed.
Dentre os enfoques da área de finanças comportamentais, o impacto do comportamento irracional e especulativo dos investidores tem chamado atenção dos estudiosos, diante de evidências que indicam uma possível influência da assimetria idiossincrática inserida no contexto da percepção dos investidores em sua tomada de decisão e, consequentemente, nos preços e retornos dos ativos. Por vezes, não é difícil encontrar situações em que expectativas otimistas ou pessimistas impactem de alguma maneira no mercado financeiro. A assimetria idiossincrática pode ser entendida como a preferência dos investidores por uma assimetria positiva, contrariando as premissas da Teoria da Utilidade Esperada. Já o sentimento dos investidores pode ser definido de maneira bastante ampla, porém, a questão subjacente desse sentimento abarca principalmente a maneira como tais investidores interpretam e reagem aos acontecimentos cotidianos para que possam construir suas crenças. As ofertas públicas iniciais de ações (IPO) são aquelas em que as empresas listadas em bolsa disponibilizam pela primeira vez a venda de suas ações. Sendo assim, compreender a maneira em que o mercado financeiro funciona pode ser de grande valia para auxiliar os investidores em sua percepção e em sua estratégia de negociação de ativos, ao levarem em consideração os fatores de impacto dos preços das ações e, se vale a pena, diante de possíveis especulações, postergar ou não sua tomada de decisão a partir da avaliação dos retornos e riscos assumidos ao investir em ativos em seu primeiro dia de negociação em bolsa. Diante dessa perspectiva, o objetivo desta pesquisa é o de investigar a relação entre a irracionalidade dos investidores e os retornos do primeiro dia das empresas brasileiras que realizaram IPO, no período de 2004 a 2014. A amostra contou com 106 empresas, dentre as 152 que realizaram IPO nesse intervalo de 11 anos. A pesquisa tomou como base o modelo desenvolvido por Aissia (2014), que verificou também a influência da assimetria idiossincrática e sentimento do investidor, porém no mercado financeiro da França. O método utilizado para a estimação do modelo proposto foi por meio da análise de regressão por mínimos quadrados (OLS). Os resultados encontrados permitiram que uma das hipóteses de pesquisa fosse confirmada, pois constatou-se que a assimetria idiossincrática afetou positivamente os retornos do primeiro dia das IPO’s inerentes às empresas que compuseram a amostra. O presente trabalho pode enriquecer a discussão acerca dos aspectos inerentes à irracionalidade dos investidores na tomada de decisão, a partir de uma peculiaridade ainda não investigada no âmbito do mercado brasileiro, fazendo relação com a preferência por assimetria propriamente dita, de maneira a abrir novos horizontes para propostas de estudos futuros.
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Meluzín, Tomáš. "Problematika financování podniků prostřednictvím Initial Public Offering." Doctoral thesis, Vysoké učení technické v Brně. Fakulta podnikatelská, 2008. http://www.nusl.cz/ntk/nusl-233714.
Full textAbstract:
The present PhD thesis deals with initial public offerings (IPOs) on the Czech capital market. Unlike the Czech Republic, financing company activities through IPOs is widespread globally and advanced capital markets utilize IPOs as a traditional means of raising funds for further enterprise development. If there were no chance to raise capital this way, the international financial system, and thereby also the economic system, would be different from what they are today. Considering that it is not common to finance enterprise development through IPOs on the Czech capital market, the thesis focuses on creating a comprehensive view of the issue of IPOs on the Czech market and aims to acquire new information in this field. This is why the thesis is divided into theoretical and practical sections. The theoretical section provides an analysis of the state of the art in the sphere of IPOs that is based on foreign literature since Czech literature offers only limited information regarding IPOs. As part of the analysis, the term ´initial public offering´ is defined and its Czech equivalent is proposed. The analysis further comprises the advantages and disadvantages linked to this type of financing, it describes the development of IPOs on foreign markets and, last but not least, it explains the cyclical character of IPOs. Specific phenomena accompanying IPOs in advanced markets are defined here. These are underpricing of issues and long-term lower performance of issuers in the post-IPO period. Another part of the theoretical section analyzes all significant costs related to IPOs. The practical section of the thesis, which focuses on the Czech capital market, determines major prerequisites for running an IPO as well as the way an IPO is done. A complex analysis of the causes behind the low number of IPOs in the Czech Republic is carried out and the results of quantitative research into the causes of little interest in financing enterprise development this way are presented. This is followed by an assessment of IPOs done in the Czech Republic so far and by introduction of the results of qualitative research examining particular issuers. In conclusion, the issue of IPOs is summed up and further perspectives of development are outlined.