Download or read book Investors Demand for IPO s and First Day Performance written by John Cheluget and published by . This book was released on 2016-03-18 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Pricing and Performance of Initial Public Offerings in the United States written by Arvin Ghosh and published by Routledge. This book was released on 2017-07-05 with total page 137 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this timely volume on newly emerging financial mar- kets and investment strategies, Arvin Ghosh explores the intriguing topic of initial public offerings (IPOs) of securities, among the most significant phenomena in the United States stock markets in recent years. Before the 2000-2001 market turndown, hardly a week went by when more than a few companies did not become public, either in the organized stock exchange or in the Over the Counter (OTC) market. In the often over-burdened, technology-heavy Nasdaq market, the role of IPOs was crucial for the market's new vigor and growth. Internet stocks were able to find a mode to supply key momentum to the market. In the so-called "New Economy" of the 1990s, it was the seductively accessible IPO that ushered in the world's information technology revolution.Ghosh sets out to examine the pricing and financial performance of IPOs in the United States during the period 1990-2001. In the opening chapter he discusses the rise and fall of IPOs in the preceding decade. Chapter 2 further delineates the IPO process from the start of the prospectus to the end of the "quiet period" and aftermarket stabilization. In chapter 3 Ghosh analyzes the mispricing and deliberately deceptive underpricing, or "flipping," of Internet IPOs. Chapter 4 delves deeper into the pricing and operating efficiency of Nasdaq IPOs. Chapter 5 analyzes the pricing and long-run performance of IPOs both in the New York Stock Exchange and in the Nasdaq markets. In chapters 6 and 7 the author deals with the pricing and performance of the venture-blocked and nonventure-backed IPOs in general and Internet IPOs in particular. In chapter 8 he analyzes the role of underwriters as market makers. In chapter 9 Ghosh discusses the accuracy of analysts' earnings forecasts. In the concluding chapter, he summarizes the principal findings of the study and the recent revival of the IPO market and its place in capital formation as well as the latest developments in t
Download or read book Inside IPOs written by Richard J. Peterson and published by McGraw-Hill Companies. This book was released on 2001 with total page 280 pages. Available in PDF, EPUB and Kindle. Book excerpt: "From precipitous drops after opening day run-ups to steady gains after opening day disappointments, Inside IPOs explains what to watch for in an IPO's price movement and how to keep profits while protecting against losses. It analyzes the performance of numerous respected sectors - from retailing and healthcare to natural resources and leisure pursuits - and reveals which promise to deliver strong performance well into the 21st century." "Whether you are looking to add initial public offerings to your investment mix or simply want to learn more about one of today's most well-known yet little-understood investment phenomena, Inside IPOs is today's most even-handed and timely report on the risks and rewards of IPO investing."--BOOK JACKET.
Download or read book IPO Underpricing in Germany Empirical Analysis of Influencing Variables written by Justyna Dietrich and published by diplom.de. This book was released on 2011-10-27 with total page 76 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inhaltsangabe:Introduction: Detected on the US market centuries ago, underpricing is the phenomenon of abnormal first-day returns from initial public offerings (IPOs). Without doubt, any US investor would agree, that one day-returns of 11.4% on average are exceptional and a worthwhile investment. Since then many studies have proven that it is a persistent phenomenon and also occurs on markets all over the world. The most puzzling question for scientists is why companies are leaving this money on the table and don t set an offering price that reflects the market demand at the offering date. Within that, researchers have also been trying to determine the factors that influence the severity of underpricing. Many different explanations with regard to the existence of underpricing have been derived thus far, with all claiming to be valid even if not exclusively. But despite this effort, research so far has not been able to create common sense. Some even argue that underpricing may not exist at all since most IPOs underperform severely in the long-run which leads some people to the conclusion that IPOs are in fact overpriced. The main focus of this paper is whether and how the findings of past research, primarily conducted for the US market, apply to the German IPO market. As a result, both investors and issuers shall receive practical implications for their decision-making within the IPO process. So far, profound underpricing research for the German market has been rather scarce. Most of the available literature concentrates either on dates before 1997 when most offering prices have been determined by using the fixed price mechanism whereas the most recent studies focus on the German stock exchange segment Neuer Markt exclusively. In contrast, this paper aims to give a more recent analysis of underpricing on the German market without distinguishing between different market segments. Additionally, a broad over-view and understanding of IPO underpricing, taking the long-run performance of IPOs into account, will be included. As a result, this paper is structured as follows: The second section consists of a description of some of the important theoretical aspects that have influence on the price setting of an IPO. It will concentrate on business valuation as it is the basis for setting the price of an IPO. Furthermore, the most common price setting mechanisms shall be explained. Additionally, the special role of the lead underwriter in the IPO [...]
Download or read book The Phenomenon of IPO Underpricing in the European and U S Stock Markets written by Oliver Reiche and published by Anchor Academic Publishing (aap_verlag). This book was released on 2014-06-23 with total page 105 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Initial Public Offering (IPO) marks one of the most important events of a company. Basically, the aim is to generate maximum proceeds by selling the company’s shares to investors. However, the shares that are sold seem to be underpriced as the price significantly soars on the first trading day. Since the very first detection of this phenomenon in the United States in 1969, several subsequent studies have documented the existence of worldwide IPO underpricing. This study focuses on IPO Underpricing in the European and United States Stock Markets by outlining and discussing the following essential issues: What is underpricing in the context of the IPO? Which motivations are there and how do they impact? Is there IPO underpricing in the markets of Europe and the United States of America?
Download or read book IPO Market Timing with Uncertain Aftermarket Retail Demand written by Francisco Santos and published by . This book was released on 2016 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: We develop a simple model of IPO timing with uncertain aftermarket retail demand. Firms prefer to go public when they expect to exploit sentiment-driven investors' overvaluations by setting offer prices above fundamental value. However, some firms have profitable investment opportunities that require immediate financing. This generates two empirical predictions: (i) the quality of the issuers' investments and (ii) their long-run performance decrease with expected retail demand. Using average IPO first-day returns as a proxy for retail demand, we find strong empirical support for the model. First, following the IPO, issuers in low-underpricing periods become more profitable and have higher investment rates than their peers. In contrast, issuers in high-underpricing periods have similar investment rates as their control firms, but become less profitable. Second, issuers in high-underpricing periods tend to underperform in the long-run, while issuers in low-underpricing periods do not.
Download or read book The Oxford Handbook of IPOs written by Douglas Cumming and published by Oxford University Press. This book was released on 2018-11-15 with total page 841 pages. Available in PDF, EPUB and Kindle. Book excerpt: Initial public offerings (IPOs), or new listings of companies on stock exchanges, are among the most important form of finance and generate considerable attention and excitement. They are used to raise capital or to monetize investments by the early generation of venture capital and other private investors. They are increasingly international in scope and reach, especially with non-American firms offering on American stock exchanges. This handbook provides a comprehensive overview of why companies list on stock exchanges, how IPOs are regulated, initially valued, and their performance in the short and long run. The first part examines the economics of IPOs, and offers statistics and regulatory insights from the United States and other countries around the world. The volume then covers mergers versus IPOs, as well as reverse mergers and special purpose acquisition companies. Part III analyzes institutional ties in IPOs, including analysts, investment banks, auditors, and venture capitalists. The fourth section provides international perspectives on IPOs from a number of countries around the world. Part V discusses alternatives to IPOs, including private marketplaces, and crowdfunding. Reflecting the range of disciplines that analyze IPOs, the contributors come from the fields of finance, international business and management, economics, and law. The chapters cover the latest information on a range of fundamental questions that are of interest to academics, practitioners, and policymakers alike.
Download or read book Variables Influencing the Severity of IPO Underpricing An Empirical Analysis of the German Market written by Justyna Dietrich and published by Diplomica Verlag. This book was released on 2012-03 with total page 81 pages. Available in PDF, EPUB and Kindle. Book excerpt: Underpricing refers to the phenomenon of abnormal first-day returns from initial public offerings (IPOs). Without doubt, any US investor would agree that one day-returns of 11.4% on average are exceptional and a worthwhile investment. Since then many studies have proven that it is a persistent phenomenon and also occurs on markets all over the world. The most puzzling question for scientists is why companies are leaving this money on the table and do not set an offering price that reflects the market demand at the offering date. The main focus of this paper is whether and how the findings of past research, primarily conducted for the US market, apply to the German IPO market. As a result, both investors and issuers shall receive practical implications for their decision-making within the IPO process. This study comprises a brief description of some important theoretical aspects that shape the price setting of an IPO. It focuses on business valuation as it is the basis for setting the price of an IPO. Furthermore, the most common price setting mechanisms are explained. Past research results and theories with regard to IPO underpricing will be outlined and put into relation to the upcoming analysis. This also includes the long-run performance of IPOs and deals especially with the question of whether IPOs are systematically overvalued by investors and, if so, why. The empirical analysis consists of a deduction of influencing variables and an applying theoretical model. Finally, OLS results will be presented and interpreted, which also includes practical implications for both, issuers and investors.
Download or read book IPO Pricing in Japan written by Kazuya Matsuo and published by . This book was released on 2018 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the impact of first price revision that reflects institutional investors' demand on subsequent price formation in initial public offerings (IPOs). Unique setting of the Japanese IPO process allows retail investors to observe institutional investors' preliminary demand for the issue prior to making their decisions on whether to participate in building of the order book. We provide several interesting findings. First, the results show that first price revision (indication of demand by institutional investors) is positively associated with offering and aftermarket prices including the first day initial returns. Second, we find that first price revision has significantly weaker influence on subsequent price formation in hot markets, where retail investors are more likely to take sentiment motivated trading behavior. This finding is inconsistent with the partial price adjustment hypothesis. Third, we find that first price revision is positively associated with long-run IPO performance. These results suggest that prior institutional investors participation have significant influence on retail investors' participation whereas retail investors are more likely to make irrational decisions when they are overly optimistic due to the hot market sentiment. Overall, first price revision, which largely reflect institutional investors' preliminary demand conveys important information on the quality of IPO firms to individual investors.
Download or read book IPOs and Equity Offerings written by Ross Geddes and published by Elsevier. This book was released on 2003-06-06 with total page 273 pages. Available in PDF, EPUB and Kindle. Book excerpt: An initial public offering (IPO) is one of the most significant events in corporate life. It follows months, even years of preparation. During the boom years of the late 1990s bull market, IPOs of growth companies captured the imagination and pocketbooks of investors like never before. This book goes behind the scenes to examine the process of an offering from the decision to go public to the procedures of a subsequent equity offering. The book is written from the perspective of an experienced investment banker describing the hows and whys of IPOs and subsequent equity issues. Each aspect of an IPO is illustrated with plenty of international examples pitched alongside relevant academic research to offer a combination of theoretical rigour and practical application. Topics covered are: - the decision to go public- legal and regulatory aspects of an offering; marketing and research- valuation and pricing- allocations of shares to investors - examination of fees and commissions * Global perpective: UK, European and US practices, regulations and examples, and case studies* First hand experience written by an IPO trader with academic rigour* Includes the changes in the market that resulted from 1998-2000 equity boom
Download or read book Popularity A Bridge between Classical and Behavioral Finance written by Roger G. Ibbotson and published by CFA Institute Research Foundation. This book was released on 2018 with total page 128 pages. Available in PDF, EPUB and Kindle. Book excerpt: Classical and behavioral finance are often seen as being at odds, but the idea of “popularity” has been introduced as a way of reconciling the two approaches. Investors like or dislike various characteristics of securities for rational reasons (as in classical finance) or irrational reasons (as in behavioral finance), which makes the assets popular or unpopular. In the capital markets, popular (unpopular) securities trade at prices that are higher (lower) than they would be otherwise; hence, the shares may provide lower (higher) expected returns.This book builds on this idea and expands it in two major ways. First, it introduces a rigorous asset pricing model, the popularity asset pricing model (PAPM), which adds investor preferences for security characteristics other than the risk and expected return that are part of the capital asset pricing model. A major conclusion of the PAPM is that the expected return of any security is a linear function of not only its systematic risk (beta) but also of all security characteristics that investors care about. The other major contribution of the book is new empirical work that, while confirming the well-known premiums (such as size, value, and liquidity) in a popularity context, supports the popularity hypothesis on the basis of portfolios of stocks based on such characteristics as brand value, sustainable competitive advantage, and reputation. Popularity unifies the factors that affect price in classical finance with those that drive price in behavioral finance, thus creating a unifying theory or bridge between classical and behavioral finance.
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 Pricing of First Day Opening Price Returns for ChiNext IPOs written by Qi Deng and published by . This book was released on 2019 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: We study the listing day opening price return and compare it with the closing price return for ChiNext IPOs after the China Securities Regulatory Commission (CSRC) adopted a new "Chinese-style" bookbuilding process. We start from a traditional OLS model by screening a set of potential variables, characterized in the existing literature. Through a variable reduction process, we identify 7 significant variables for each of the return series. We further utilize a GARCH-M model with an ARMA(1,1) adjustment in the residuals to correct possible autocorrelation in the returns and cross-correlation between the return and its conditional variance to improve the model. We find that the opening price synthesizes the overall market demand for new shares from institutional and individual investors as the subscription ratios from both sectors are highly significant (oversubscriptions). In addition, the market condition over the past 21 trading days prior to listing a ChiNext IPO (market momentum), offer size (size effect), and conditional return variance (asymmetric information) are also significant. We find similar significant variables that affect the closing price return except the subscription ratio from individual investors. Overall, the opening price return contains valuable information to predict the closing price return.
Download or read book Does Sentiment Drive the Retail Demand for Ipos written by Daniel Dorn and published by . This book was released on 2004 with total page 47 pages. Available in PDF, EPUB and Kindle. Book excerpt: Individual and institutional investors can trade German initial public equity offerings on an as-if/when-issued basis before the start of secondary trading. Using a novel data set of pre- and post-IPO trades made by a sample of clients at a large German retail broker, the paper documents that retail investors both are willing to overpay and end up overpaying for IPOs, especially following periods of high returns in recent new issues. IPOs that are more aggressively bought by retail investors in the pre-IPO market or on the day of the IPO post higher first-day returns, but also experience lower aftermarket returns, controlling for firm characteristics such as size and book-to-market ratio. In short, sentiment - expectations about asset values unwarranted by fundamentals - drives retail purchases of IPOs and appears to have a transitory effect on prices.
Download or read book Risks during the IPO Process written by Tim Meierkord and published by GRIN Verlag. This book was released on 2016-12-21 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2016 in the subject Business economics - Investment and Finance, grade: 1,7, University of Applied Sciences Essen, language: English, abstract: Companies all over the world need liquid assets to start, grow or save their businesses. There are several options for companies to get access to these assets, such as the classical use of revenues or to raise a credit at a bank. But these options are maybe not sufficient enough or limited in time. To reach their goals companies can raise the funds in the capital market through an initial public offering. Due to the advancing globalization and digitalization companies theoretically can gather money through the IPO from all over the world. As the IPO is considered to be one of the most significant events in the life cycle of companies a profound analysis of the advantages and disadvantages of IPOs is needed to be conducted by the companies.
Download or read book Initial Public Offerings Findings and Theories written by Seth Anderson and published by Springer Science & Business Media. This book was released on 2012-12-06 with total page 126 pages. Available in PDF, EPUB and Kindle. Book excerpt: Initial public offerings (IPOs) play a crucial role in allocating resources in market economies. Because of the enormous importance of IPOs, an understanding of how IPOs work is fundamental to an understanding of financial markets generally. Of particular interest is the puzzling existence of high initial returns to equity IPOs in the United States and other free-market economies. Audience: Designed for use by anyone wishing to perform further academic research in the area of IPOs and by those practitioners interested in IPOs as investment vehicles.
Download or read book Going Public written by Tim Jenkinson and published by Oxford University Press, USA. This book was released on 2001 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: Going Public investigates why companies routinely underprice themselves as they try to list themselves on the stock exchange. They subsequently underperform over the long-term and, in Going Public, the authors explore these 2 phenomena in plain English.
