Download or read book A Theory of IPO Waves written by Ping He and published by . This book was released on 2006 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the IPO market, investors coordinate on acceptable IPO price based on the performance of past IPOs, and this generates an incentive for investment banks to produce information about IPO firms. In hot periods, the information produced by investment banks improves the quality of IPO firms, and this allows ex-ante low quality firms to go public and increases the secondary market price, thus synchronizing high IPO volumes and high first day returns. When investment banks behave asymmetrically in information production, the reputations of investment banks are interpreted as a form of market segmentation to economize on the social cost of information production.
Download or read book IPO Waves Product Market Competition and the Going Public Decision written by Thomas J. Chemmanur and published by . This book was released on 2012 with total page 73 pages. Available in PDF, EPUB and Kindle. Book excerpt: We develop a new rationale for IPO waves based on product market considerations. Two firms, with differing productivity levels, compete in an industry with a significant probability of a positive productivity shock. Going public, though costly, not only allows a firm to raise external capital cheaply, but also enables it to grab market share from its private competitors. We solve for the decision of each firm to go public versus remain private, and the optimal timing of going public. In equilibrium, even firms with sufficient internal capital to fund their new investment may go public, driven by the possibility of their product market competitors going public. IPO waves may arise in equilibrium even in industries which do not experience a productivity shock. Our model predicts that firms going public during an IPO wave will have lower productivity and post-IPO profitability but larger cash holdings than those going public off the wave; it makes similar predictions for firms going public later versus earlier in an IPO wave. We empirically test and find support for these predictions.
Download or read book Stock Prices and IPO Waves written by Luboš Pástor and published by . This book was released on 2003 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: We develop a model of stock valuation and optimal IPO timing when investment opportunities are time-varying. IPO waves in our model are caused by declines in expected returns, increases in expected profitability, or increases in prior uncertainty about average profitability. The model predicts that IPO waves are preceded by high market returns, followed by low market returns, and accompanied by high stock prices. These as well as other predictions are supported empirically. Stock prices at the peak of the recent bubble', which was associated with an IPO wave, are consistent with plausible parameter values in our rational valuation model
Download or read book Stock Prices and IPO Waves written by Lubos Pastor and published by . This book was released on 2015 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: We develop a model of stock valuation and optimal IPO timing when investment opportunities are time-varying. IPO waves in our model are caused by declines in expected returns, increases in expected profitability, or increases in prior uncertainty about average profitability. The model predicts that IPO waves are preceded by high market returns, followed by low market returns, and accompanied by high stock prices. These as well as other predictions are supported empirically. Stock prices at the peak of the recent quot;bubblequot;, which was associated with an IPO wave, are consistent with plausible parameter values in our rational valuation model.
Download or read book Handbook of Research on IPOs written by Mario Levis and published by Edward Elgar Publishing. This book was released on 2013-11-29 with total page 599 pages. Available in PDF, EPUB and Kindle. Book excerpt: The chapters offer some important new insights into issues that will be of interest not only to the academic community but also to professionals involved in the preparation, structure and execution of such transactions, market regulators, and private a
Download or read book The Oxford Handbook of Entrepreneurial Finance written by Douglas Cumming and published by OUP USA. This book was released on 2012-03-22 with total page 937 pages. Available in PDF, EPUB and Kindle. Book excerpt: Provides a comprehensive picture of issues dealing with different sources of entrepreneurial finance and different issues with financing entrepreneurs. The Handbook comprises contributions from 48 authors based in 12 different countries.
Download or read book Building Castles in the Air written by Zhi Da and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We provide empirical support for the conventional wisdom that there are times when optimistic investors tend to build their hopes into castles in the air, and pay a large premium over intrinsic value for stocks of firms in the early stages of their life cycles with perceived growth opportunities. We use industry IPO waves containing a set of firms in the same industry that went public at about the same time in a cluster to identify those time periods and firms that are relatively homogenous and in the same early growth stages of their life cycles. We find that three years after an industry IPO wave ends, among the firms in the wave with relatively high historical sales growth rates, those with low gross margins are over-valued relative to firms with high gross margins. They under-perform their industry IPO wave peers by 0.92% per month, or about 12% per year, during the subsequent four-year period after adjusting for risk and firm characteristics differentials. Further, the average future returns on these firms are even below the corresponding risk-free returns. Our findings contribute to the literature on inefficient capital markets by identifying situations when prices of some stocks are likely to be affected by bounded rationality or biases in the way investors make decisions, and agency issues limit the ability of more sophisticated arbitrageurs who have to rely on other people's money from exploiting any resultant profit opportunities.
Download or read book Rational IPO Waves written by Luboš Pástor and published by . This book was released on 2003 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Initial Public Offering IPO and theories of underpricing written by Henning Padberg and published by GRIN Verlag. This book was released on 2007-11-30 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: Essay from the year 2006 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,3, University of Glasgow (Department of Accounting and Finance), course: Financial Markets, language: English, abstract: Related to the issuance of shares there are different kinds of “puzzles” which motivate to take a closer look at: Short-run ‘underpricing’, hot and cold issue markets, spread clustering and longrun underperformance. Even though these phenomena are frequently discussed in several scientific papers and journals, there is no conclusively completed theory. This work will concentrate on the various approaches developed to explain ‘underpricing’. As an introduction into the topic it will also provide a summary of the process of an Initial Public Offering (IPO).
Download or read book Riding the IPO Wave written by Matthew Fletcher and published by . This book was released on 1996 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book A Theory of IPO Underpricing Issue Activity and Long Run Underperformance written by Ralph Bachmann and published by . This book was released on 2005 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: We present a dynamic model of an IPO market in which firms go public to raise capital for investment. The original shareholders have inside information with respect to the quality of their firm's investment opportunities, and they decide whether to go public, how much capital to raise and invest, and how to price the IPO. Outside investors are of one of two types: some investors know and understand even the not directly observable economic incentives of the original shareholders, whereas all other investors learn about the IPO market only from the publicly observable IPO market data. Market participation by the latter investors can upset the stationary rational equilibrium and give rise to a dynamic equilibrium that is characterized by: (1) IPO underpricing, (2) underperformance of IPO shares in the long run, and (3) cyclical variations in IPO volume. Learning investors upset the stationary equilibrium not because of ex ante unreasonable beliefs, but because they fail to condition their beliefs on variables that convey only redundant information in the stationary equilibrium. The model provides a joint explanation for the three empirically documented IPO market quot;anomalies,quot; and it yields a number of new testable empirical predictions.
Download or read book Wave Theory For Alternative Investments Riding The Wave with Hedge Funds Commodities and Venture Capital written by Stephen Todd Walker and published by McGraw Hill Professional. This book was released on 2010-12-17 with total page 545 pages. Available in PDF, EPUB and Kindle. Book excerpt: A revolutionary new alternative-investment approach that protects investors from another meltdown High-net-worth investors are allocating about 20% of assets into alternative investment strategies—up from 3% in 2000 Walker was named one of Barron's 2009 Top 1,000 Advisers and one of the Top 25 Wealth Advisers by the Philadelphia Business Journal He worked for Alex.Brown, which took Starbucks and Microsoft public
Download or read book Growth Versus Margin and Castles in the Air written by Zhi Da and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We provide empirical support for the folk wisdom that at times, when optimistic investors tend to build their hopes into castles in the air, the stock market over-values growth stocks. Using industry IPO waves containing relatively homogenous groups of firms in the same growth stage of their life cycles to identify those times, we find that firms with relatively high price to book ratios and high historical sales growth rates but low gross margins in the three years following the IPO wave, under-perform their industry IPO wave peers by 0.92% per month during the subsequent four-year period after adjusting for risk differentials.
Download or read book Initial Public Offerings written by Michelle Lowry and published by . This book was released on 2017 with total page 166 pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this monograph is to provide an overview of the IPO literature since 2000. The fewer numbers of companies going public in recent years has raised many questions regarding the IPO process, in both academic and regulatory circles. As we all strive to understand these changes in the market, it is especially important to understand the dynamics underlying the IPO process. If the process of going public is too costly or the IPO mechanism is plagued by too many conflicts of interest among the various intermediaries, then private companies may rationally choose other methods of raising capital. In a related vein, it is imperative that new regulations not be based on research focusing solely on large, more mature firms. Newly public firms have unique characteristics, and an increased understanding of such issues will contribute positively to well-functioning public markets and further growth of the entrepreneurial sector. We also provide a detailed guide to researchers on how to obtain a research-quality sample of IPOs, from standard data sources. Related to this, we tabulate important corrections to these standard data sources.
Download or read book The Oxford Handbook of IPOs written by Douglas Cumming and published by . This book was released on 2018 with total page 841 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book provides a comprehensive analysis of IPOs. The chapters cover the latest information on a range of fundamental questions, including: How are IPOs regulated? How are IPOs valued? How well does an IPO perform in the short and long run, and what are the drivers of performance?
Download or read book The IPO Decision written by Jason Draho and published by Edward Elgar Publishing. This book was released on 2004-01-01 with total page 400 pages. Available in PDF, EPUB and Kindle. Book excerpt: Annotation Initial public offerings (IPOs) garnered unprecedented positive attention in the 1990s for their spectacular returns and central role in entrepreneurial activity. Subsequent revelations of unscrupulous IPO allocation and promotion practices cast a less fa.
Download or read book The Theory of Corporate Finance written by Jean Tirole and published by Princeton University Press. This book was released on 2010-08-26 with total page 657 pages. Available in PDF, EPUB and Kindle. Book excerpt: "Magnificent."—The Economist From the Nobel Prize–winning economist, a groundbreaking and comprehensive account of corporate finance Recent decades have seen great theoretical and empirical advances in the field of corporate finance. Whereas once the subject addressed mainly the financing of corporations—equity, debt, and valuation—today it also embraces crucial issues of governance, liquidity, risk management, relationships between banks and corporations, and the macroeconomic impact of corporations. However, this progress has left in its wake a jumbled array of concepts and models that students are often hard put to make sense of. Here, one of the world's leading economists offers a lucid, unified, and comprehensive introduction to modern corporate finance theory. Jean Tirole builds his landmark book around a single model, using an incentive or contract theory approach. Filling a major gap in the field, The Theory of Corporate Finance is an indispensable resource for graduate and advanced undergraduate students as well as researchers of corporate finance, industrial organization, political economy, development, and macroeconomics. Tirole conveys the organizing principles that structure the analysis of today's key management and public policy issues, such as the reform of corporate governance and auditing; the role of private equity, financial markets, and takeovers; the efficient determination of leverage, dividends, liquidity, and risk management; and the design of managerial incentive packages. He weaves empirical studies into the book's theoretical analysis. And he places the corporation in its broader environment, both microeconomic and macroeconomic, and examines the two-way interaction between the corporate environment and institutions. Setting a new milestone in the field, The Theory of Corporate Finance will be the authoritative text for years to come.
