Download or read book Three Essays on Initial Public Offerings and Market Information written by William C. Johnson and published by . This book was released on 2006 with total page 322 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Initial Public Offerings written by Matti Keloharju and published by . This book was released on 1992 with total page 126 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book 3 Essays Essays on Initial Public Offerings written by Qiming Wang and published by . This book was released on 2005 with total page 180 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Initial Public Offerings written by Cheolwoo Lee and published by . This book was released on 2008 with total page 326 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Initial Public Offerings and Real Estate Investment Trusts written by Sandra F. Holsonback and published by . This book was released on 2003 with total page 262 pages. Available in PDF, EPUB and Kindle. Book excerpt: Initial Public Offerings (IPOs) are financial vehicles whereby firms can raise capital through public markets. These vehicles increased in importance in the 1990's when financial institutions were reluctant to lend money, especially to young or unestablished firms. Private real estate companies, hampered by these tight credit markets, formed Real Estate Investment Trusts (REITs), a public entity. REIT IPOs trade on the same markets and are subject to the same SEC regulations as equity stocks, but the lack luster behavior of their initial stock offerings is opposite to large initial day returns exhibited by equity stocks. In proposing that underpricing is a strategy utilized by the firm and the underwriter, this study, comparing IPOs of four industries: retail, manufacturer of communication equipment, software development, and REITs, validates the theory of asymmetric information, whereby investors are compensated for risk through underpricing.

Download or read book Three Essays on Initial Public Offerings written by Chuntai Jin and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: IPO -- operating performance -- offering size -- analyst forecast -- valuations -- new capital.

Download or read book Three Essays on the Information Content of Stock Options written by Zekun Wu and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays that explore the information content embedded in equity options. The results improve our understanding of the cross-section of option returns, informed trading in the options market, and the industry effect of IPOs. In the first essay, we study the relation between option-implied skewness (IS) and the crosssection of option returns under daily hedging to better understand skewness pricing in isolation from lower moments. Creating portfolios of delta-hedged (D-hedged) and delta-vega-hedged (DV-hedged) options with daily rebalancing, we find that IS is negatively (positively) related to call (put) option returns, but the relation to put options is statistically significant only during economic recessions. The relation is more substantial when the underlying stock has a larger market beta and when the firm has more severe information opacity. Our results suggest that investors' skewness preference grows stronger with greater market risk and lower information quality. In the second essay, we examined the informed trading in the options market before FDA drug advisory committee meetings. We find significant abnormal options trading volume before both meeting dates and report creation dates, particularly for small drug firms. Abnormal volume significantly predicts post-meeting stock returns. Informed traders prefer out-of-the-money options and choose maturities to cover the dates when reports are publicly released. They prefer to sell options close to the meeting date, perhaps to capture returns from both expected stock price changes and the sharp drop in implied volatility post-meeting. In the third essay, I investigate the effect of initial public offerings (IPOs) on industry competitors' options market. I find that rival firms' put (call) options volume increases (decreases) around IPOs, leading to price pressure on call options relative to put options as measured by the implied volatility spread. Rival firms' reaction in the options market also predicts the IPO firms' post-IPO stock performance. Lastly, rival firms with strong operating income experience less negative impact in the options market, suggesting competitive operation performance help stabilize rival firms' options market around IPOs.

Download or read book Essays on Initial Public Offerings written by Laura Bernadette Field and published by . This book was released on 1997 with total page 324 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Initial Public Offerings written by Hugh Monte Joseph Colaco and published by . This book was released on 2006 with total page 109 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the second essay, it is argued that the time following an amendment in which demand is revealed has a cost. So, why do some firms take longer than others to go public following the amendment? It is hypothesized that the delay to the offer results from overestimation of demand and risk. As a result, underpricing predicted at the amendment is not indicative of the final level of underpricing. The firm and its investors bear the costs of the delay. This study highlights the distinction between partial and full information and the costs associated with SEC requirements.

Download or read book Three Essays on Corporate Disclosure and Information Externalities written by Yetaotao Qiu and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation includes three essays on corporate disclosure and information externalities. In the first essay, I examine the disclosure behavior of rival firms identified by an Initial Public Offering (IPO) candidate during the IPO quiet period when the IPO candidate is restricted in its communication. I find that the tone of disclosures made by identified rivals becomes more positive during the quiet period, and reverses after the quiet period ends. The strategic disclosure behavior is mainly driven by identified rivals' concerns over product market competition. I also find that this behavior hurts the IPO candidate and benefits the identified rivals. In the second essay, I investigate the relations between IPO firms' peer choice and peer information environment. I find that IPO firms tend to select peer companies with a better information environment, and this effect is more pronounced for IPO firms with greater information uncertainties. I also find support that peer information environment is positively associated with upward offering price revision, post-offering analyst coverage, and negatively associated with the number of amendment filings. Overall, this essay shows that IPO firms can make use of the externalities of peer information to facilitate their initial public offerings. In the third essay, I switch my focus from intra-industry relations to supply chain relations. More specifically, I study the effects of layoff announcements by customers on the valuation and operating performance of their supply chain partners. I find that suppliers experience a negative stock price reaction around their major customers' layoff announcements. The negative price effect is exacerbated when industry rivals of layoff-announcing customers also suffer from negative intra-industry contagion effects. Moreover, these supply chain spillover effects are asymmetric, with only "bad news" layoff announcements causing significant value implications for suppliers, but not "good news" announcements. Supplier firms also reduce their investment in and sales dependence on layoff-announcing customers in subsequent years. Keywords: Disclosure; Product market competition; IPO quiet period; Identified rivals; Information externalities; Peer information environment; Corporate layoffs, Supply chain relations; Stock market return

Download or read book Essays on initial public offerings and stock market rumors written by Jos van Bommel and published by . This book was released on 1999 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Corporate Finance written by Tianze Li and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The thesis consists of three essays on corporate finance. In the first essay, we test the hypothesis that the stock market tends to overvalue initial public offerings (IPOs), assuming that IPO issuers can value their own firms more accurately. Using the lower limit of initial file price range as issuers' reservation price, we estimate the premiums of IPO first day closing price and first month closing price over the reservation price. We find that the price premiums are positively associated with proxies for market over-optimism and uncertainty. IPOs with higher price premiums have worse stock performance in the long run. The results are robust to various economic specifications. The findings are consistent with the argument that the stock markets get over-optimistic about IPOs from time to time. In the second essay we investigate insider selling activities for IPO firms. We find that insiders in 31.3% of IPOs sell shares prior to lock-up expiration (early sales). Consistent with the IPO over-optimism hypothesis, IPO price premium is positively correlated with early sales as well as sales following lock-up expiration (late sales), which suggests that insiders of overvalued IPOs tend to opportunistically liquidate their holdings. In addition, empirical evidences show that insiders may exploit IPO mispricing in the primary market to sell secondary shares and revise up total share offered. In the third essay, we explore why many firms disclose internal control (IC) deterioration under section 404 of Sarbanes-Oxley Act after previously reporting effective IC. We find empirical evidences suggesting that many of the reported IC deteriorations result from detection of previously undetected weaknesses. Restated or not, the reported deterioration in IC is associated with increase in audit fee, increase in management turnover and auditor turnover, decline in Altman Z score decile, and increase in loss. Consistent with an agency hypothesis that managers try to manipulate the IC process when firm performance declines, the reported deterioration in IC is also associated with poor stock returns in the year before disclosure. ICW disclosure is more likely when poor stock return is combined with higher sensitivity of executive compensation to stock price change.

Download or read book Initial Public Offerings Liquidity and Corporate Governance written by Saurav Roychoudhury and published by LAP Lambert Academic Publishing. This book was released on 2009-10 with total page 148 pages. Available in PDF, EPUB and Kindle. Book excerpt: The book is a compilation of three related essays on initial Public Offerings, liquidity, productivity growth and corporate governance. The first essay looks at the long run performance of initial public offerings (IPOs) in the United States relative to their liquidity profile. The book provides a liquidity based explanation for why certain IPOs underperform in the long run. The second essay relates corporate governance to a firm s productivity growth. Given technology and industry constraints, some firms are very efficient whereas others are not and some firms have much faster rates of innovation and productivity growth than others. The book seeks to provide an explanation by looking at the relationship between a firm s governance structures and total factor productivity. The third essay connects the first two essays. It looks at the differences in the long term performance of IPOs with strong and weak corporate governance.

Download or read book Essays in Financial Economics written by Francisco Jose Guedes dos Santos and published by Stanford University. This book was released on 2011 with total page 153 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays that examine various problems in financial economics. Chapter 1 fills in a gap in the IPO literature by documenting a close connection between IPO underpricing and the long-term underperformance of IPOs. Firms going public in periods of low underpricing do not underperform in the long run, while firms going public in high underpricing periods do. Furthermore, IPOs in later stages of high underpricing periods underperform even relative to their offer prices, which suggests that many of the most "underpriced" IPOs are in fact priced above fundamental value. This result is unlikely to be explained by differences in risk, or to be driven by a peso problem. I also find that firms going public in later stages of high underpricing periods display worse operating performance and profitability, lower asset growth, lower investment rates and higher cash holdings. Finally, I provide evidence that investor sentiment is stronger in high-underpricing periods. These results are consistent with a setting in which low quality firms, in periods in which the average underpricing in the market is high, try to exploit investors' sentiment by going public. Chapter 2 looks at the return predictability information in Single Country Closed-End Fund (SCCEF) discounts. It is long argued that discounts in closed-end funds are caused by differences in sentiment between investors that trade the fund and investors that trade the underlying assets. SCCEFs provide an interesting setting given the clear market segmentation. American SCCEFs are priced by American investors, while underlying assets are mainly traded by investors in the respective country. I argue that if cross-sectional and time-series variation in SCCEFs are linked to differences in sentiment, then the SCCEF discount can be used to predict future performance of SCCEFs, international stock markets, or both. The evidence on international stock markets' return predictability using SCCEF discounts is mixed. A trading strategy designed to exploit potential differences in sentiment by buying and selling international stock indices delivers alphas of around 90bps per month in an International CAPM. Adding three extra factors: value, size and momentum in U.S. equity does not change the result. However, once we control for international value and momentum in stock markets, we no longer observe positive alphas for short-horizon investments. The evidence on SCCEF return predictability from SCCEF discounts is very strong. For all three asset pricing models considered, a strategy that exploits differences in sentiment yields positive alphas, with magnitudes ranging from 2% to 4% per month. In Chapter 3, I investigate how the stock market reacts to earnings surprises announced during major sport events in the U.S. In a rational and frictionless market, investors should not react differently to announcements released during sport events. However, major sport events combine two known psychological biases. First, sports can be distracting, impairing investors' judgment. Second, sports can change people's mood. Hence, through these biases, market prices could be affected. Considering the Super Bowl, World Series of Baseball and NBA finals I find that investors, immediately after sport events, underreact to positive surprises, and overreact to negative surprises in earnings. After this initial reaction, I find that, investors undo their 'mistakes' in the following weeks to the announcement. However, for the most negative and positive surprises, they over-compensate. In this study, I show that non relevant financial events have an impact on market prices. Moreover, I show that the observed impact cannot be explained only by limited attention, as investor mood seems to be crucial to explain investors' reactions.

Download or read book Essays on Initial Public Offerings written by Ambrus Kecskés and published by . This book was released on 2008 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this thesis, I study three aspects of going public. First, I examine whether separating the decision to list on a stock exchange and the decision to issue equity decreases the underpricing costs of going public. Next, I examine the extent to which economic fundamentals versus investor sentiment drive the equity issuance activity of firms going public. Finally, I examine whether the quantity of financing raised by firms going public is associated with firm value, and, if so, why this is the case.

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 Issues in IPO Valuations written by Heather Nicole Rhodes and published by . This book was released on 2014 with total page 203 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation focuses on the effect of regulation and asymmetric information problems in the market for initial public offerings (IPOs). It consists of three essays that evaluate different aspects of the impact of regulation and asymmetric information problems on IPO valuations and pricing. The first essay retests the signaling and agency theories with a matched-sample of IPOs prior to and following the passage of the Sarbanes-Oxley Act of 2002 (SOX). Because the wealth effect could affect the results of these tests, it is also evaluated. The study is motivated by the potential impact of SOX-related governance and reporting requirements on the relative importance of adverse selection and moral hazard problems, with which the signaling and agency theories are respectively concerned, in the market for IPOs. Additionally, SOX may have affected the types of firms going public and ultimately the relative importance of adverse selection and moral hazard. Results on both the pre- and post-SOX samples are consistent with the signaling theory and evidence of a wealth effect exists in both eras, although it is more significant post-SOX. However, in contrast to results of studies conducted prior to SOX, both the pre- and post-SOX results give little credence to the agency theory, suggesting that SOX has not impacted investors' concerns regarding moral hazard. Rather, the difference between the pre-SOX results and the results of other studies conducted prior to SOX suggests that SOX appeared to reduce moral hazard concerns only through its effect on the self-selection of firms going public. The second essay utilizes a matched sample of IPOs prior to the passage of SOX and those issued after the passage of the Act to examine the role of the board structure provisions of the Act on firm value as well as the Act's general valuation consequences. We provide evidence that SOX has negatively impacted the IPO market by suppressing the number of yearly issuances, particularly deterring small issuers from entering public equity markets, and imposing binding constraints on board structure through the new exchange listing requirements. We document not only that firms going public post-SOX are much different than those going public pre-SOX, but also in matched sample comparisons, the Act does not appear to provide any valuation benefit. In particular, compliance with the board structure provisions provides no benefit and a post-SOX dummy is negative for some valuation measures. SOX thus appears to have imposed costs that prohibit many small firms from issuing IPOs, without a corresponding benefit for those that do issue. The third essay analyzes the relationship between the supply of institutional investor capital and IPO pricing. It is motivated by the recent literature documenting the importance of institutional investment to the cost of raising equity capital and the tendency of professional money managers to mimic one another's trades. I propose that institutional investment in an industry may influence the pricing of initial public offerings through the effects of competition on the pricing process, particularly by affecting the Benveniste and Spindt (1989) partial adjustment process. I hypothesize that the level and concentration in institutional investment in an industry in which an issuer operates serves as a proxy for the competitiveness of the supply of capital in that industry, and that relatively higher levels of competition reduce the need for partial adjustment. Additionally, in more competitive markets, offer price updates should be larger and initial returns should be relatively lower. The results suggest support for these hypotheses. In more competitive markets, there is less partial adjustment, offer price revisions are larger and initial returns are lower. The results on partial adjustment and offer price revisions are robust to controlling for endogeneity issues, while the results on initial returns are substantially weaker once endogeneity is addressed.