Download or read book Underpricing Stock Allocation Ownership Structure and Post listing Liquidity of IPOs Stocks written by Pathomporn Phornleesaengsuwan and published by . This book was released on 2006 with total page 116 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Underpricing Stock Allocation Ownership Structure and Post Listing Liquidity of Newly Listed Firms written by Peter K. Pham and published by . This book was released on 2011 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the relationship between underpricing, ownership structure and post-listing liquidity of initial public offerings (IPOs). It is argued that higher underpricing induces both broader investor participation and creates a more diffuse ownership structure. These two factors are in turn positively associated with the level of post-listing trading, and therefore offer an explanation of how underpricing can influence liquidity. Using a sample of Australian IPOs, we provide evidence of statistically significant relationship between underpricing and various proxies for shareholding distribution and liquidity. This result remains robust after controlling for a number of potential underlying factors that may drive both underpricing and ownership allocation decisions. Overall, our analysis suggests that liquidity is a partial but important benefit of underpricing an IPO.
Download or read book A Survey of the European IPO Market written by and published by CEPS. This book was released on 2006 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Going Public Across Borders written by Benjamin Stanton Kiely and published by . This book was released on 2015 with total page 148 pages. Available in PDF, EPUB and Kindle. Book excerpt: Initial public offering (IPO) underpricing is one of the ten major puzzles in financial research. Underpricing can be used to resolve information asymmetry between informed and uninformed investors. Even so, it is not completely understood why underpricing and uninformed participation would be of benefit to the IPO issuer. A positive association between underpricing and liquidity has been found. Two hypotheses attempt to explain this link. The 'ownership dispersion hypothesis' suggests that underpricing creates a broad ownership base aiding liquidity, while the 'information production hypothesis' suggests that underpricing generates analyst coverage, also benefitting liquidity. This research aimed to test the 'ownership dispersion' and 'information production' hypotheses, using a sample of foreign IPOs. The overarching hypothesis was that the underpricing of foreign IPOs leads to a higher level of post listing liquidity. The ownership dispersion theory then hypothesized that ownership dispersion increases with initial underpricing and ownership dispersion created by initial underpricing contributes to increased post listing liquidity. Finally the information production theory hypothesized that initial underpricing results in a higher level of information production about the firm following the IPO and that the information production generated by initial underpricing contributes to increased post listing liquidity Companies were identified that have used 'depository receipts' to perform a foreign IPO, from a combination of the depositary bank databases. Data from 183 of these companies were examined to test each research hypothesis using regression models and controlling for potential confounding variables. Robustness checks were also carried out to assess for potential misspecification bias, endogeneity bias and selection bias. The research found that underpricing did lead to significantly higher levels of post listing liquidity in the sample of foreign IPOs, supporting research hypothesis 1. Results also showed that greater underpricing of IPOs was associated with more disperse institutional ownership structure. Ownership dispersion forecast by initial underpricing was then found to have a positive association with post listing liquidity, which supports hypotheses 2a and 2b, as well as the ownership dispersion hypothesis. Although results also revealed a positive association between the level of information production and post-listing liquidity, which supports research hypothesis 3a, this relationship could not be explained by underpricing, contradicting hypothesis 3b. Therefore, the results did not support the information production hypothesis. These results were shown to be relatively robust to a selection of potential confounders, misspecification, some endogeneity issues and selection bias. Foreign IPOs often struggle with liquidity concerns. Although a body of research exists covering secondary international cross listings, there is little research examining international IPOs. To better address liquidity concerns and reduce the level of uncertainty for firms looking to list abroad, an opportunity arises to examine how IPO underpricing can be used by foreign firms to enhance post listing liquidity. This is the main contribution of this research.
Download or read book The Phenomenon of IPO Underpricing in the European and U S Stock Markets written by Oliver Reiche and published by diplom.de. This book was released on 2014-06-01 with total page 102 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 The Specific Underpricing of Ipos in U S Stock Markets written by Claus Birkenbeul and published by GRIN Verlag. This book was released on 2010-10 with total page 89 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2010 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,3, Munich Business School University of Applied Sciences, language: English, abstract: The economical development is improving and world trade volumes are expected to recover. The recorvery process is developing constantly but slowly: Share prices have rebounded within 2009, worldwide trade volumes have recovered slightly and are expected to catch up with values from the end of 2008 during the next year (cf. OECD 2009). The world is recovering from one of the most severe economic downturns since The Great Depression. Comparing GDP volumes from the previous period at the same time, OECD countries lost up to 2%. As a logical consequence the U.S. IPO market has been affected by the economic meltdown as well. "IPO activity tends to cluster in certain time periods, thus it appears in waves, so-called hot IPO markets" (Hamer 2007, 9). From 2007 to 2008 th e number of IPOs decreased. The U.S. market broke down by more than 85% in one year. In 2007 there were 160 IPOs whereas in 2008 21 securities went public fort the first time (cf. Ritter 2010, 2). After the slowest year for IPOs since the 1970s, the market began to show signs of life again in 2009. The number of offerings increased by 21% although the offering value decreased by almost 15% (cf. PWC 2010). [...]
Download or read book The Specific Underpricing of IPOs in U S Stock Markets written by Claus Birkenbeul and published by GRIN Verlag. This book was released on 2010-09-30 with total page 87 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2010 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,3, Munich Business School University of Applied Sciences, language: English, abstract: The economical development is improving and world trade volumes are expected to recover. The recorvery process is developing constantly but slowly: Share prices have rebounded within 2009, worldwide trade volumes have recovered slightly and are expected to catch up with values from the end of 2008 during the next year (cf. OECD 2009). The world is recovering from one of the most severe economic downturns since The Great Depression. Comparing GDP volumes from the previous period at the same time, OECD countries lost up to 2%. As a logical consequence the U.S. IPO market has been affected by the economic meltdown as well. "IPO activity tends to cluster in certain time periods, thus it appears in waves, so-called hot IPO markets" (Hamer 2007, 9). From 2007 to 2008 th e number of IPOs decreased. The U.S. market broke down by more than 85% in one year. In 2007 there were 160 IPOs whereas in 2008 21 securities went public fort the first time (cf. Ritter 2010, 2). After the slowest year for IPOs since the 1970s, the market began to show signs of life again in 2009. The number of offerings increased by 21% although the offering value decreased by almost 15% (cf. PWC 2010). [...]
Download or read book Underpricing Ownership Dispersion and Aftermarket Liquidity of IPO Stocks written by Steven Xiaofan Zheng and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Booth and Chua (1996) hypothesize that IPOs are underpriced to promote ownership dispersion, which in turn increases aftermarket liquidity of IPO stocks. We examine a sample of 1,179 Nasdaq IPOs and find that underpricing is positively correlated with the number of non-block institutional shareholders after IPO but negatively correlated with the changes in the total number of shareholders. Firms with many non-block institutional shareholders tend to have high liquidity in the secondary market. These results provide support to Booth and Chua's hypothesis. Underpricing also has direct effects on secondary market liquidity after controlling for ownership structure and other factors.
Download or read book Ownership Structure Corporate Governance and IPO Post Listing Liquidity written by Junheng Zhu and published by . This book was released on 2014 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates how ownership concentration and structure and corporate governance relate to the post-listing liquidity of IPO firms, where the latter is measured by various dimensions of trading activity, breadth, and depth. Using a sample of 1,049 Chinese IPOs issued on the Shanghai and Shenzhen Stock Exchanges over the 2001-2010 period, we find firms with a broader shareholder base and higher ownership concentration have greater post-listing liquidity. So do firms with a higher state ownership and lower institution ownership. Corporate governance is also important in explaining the cross-sectional differences in post-listing liquidity; specifically, post-listing liquidity is higher for firms with CEO duality, a larger and more independent board, and more frequent board meetings. The 2005 Split Share Structure Reform, which increased the proportion of tradable shares, has a positive impact on liquidity.
Download or read book Empirical Evidence on IPO Underpricing written by Marius Hamer and published by GRIN Verlag. This book was released on 2008 with total page 73 pages. Available in PDF, EPUB and Kindle. Book excerpt: Diploma Thesis from the year 2007 in the subject Business economics - Investment and Finance, grade: 1,3, European Business School - International University Schlo Reichartshausen Oestrich-Winkel, 80 entries in the bibliography, language: English, abstract: This paper aims at establishing a link between the average level of initial return of IPO shares, existing underpricing explanations and the dot-com bubble. In years prior to the boom of the new economy, underpricing was explained by various theories, which have extensively been developed since decades. However, in the years 1998 to 2001 IPOs were overly underpriced, leading to assumptions about behavioural aspects and investor irrationality. Analysing a comprehensive dataset of 371 IPOs on the Frankfurter B rse between 1997 and 2007, this paper aims at providing evidence that the observed lower levels of initial returns in recent years can indeed be aligned with existing theories on the basis of rational behaviour of market participants. Firstly, the IPO process and its major participants will be presented followed by a review of relevant studies on the IPO phenomenon. In the next step, established underpricing theories are recapitulated. A descriptive analysis of the data sample points out the particularities concerning the company and transaction characteristics of the sample firms. In a last step, a regression analysis relates various proxies for information asymmetry to established underpricing theories. It gives reason to believe that the irrationality at the turn of the century has vanished and that underpricing can again be explained by established theories.
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.
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 Advances in Financial Economics written by Kose John and published by Emerald Group Publishing. This book was released on 2013-12-18 with total page 269 pages. Available in PDF, EPUB and Kindle. Book excerpt: Advances in Financial Economics Vol. 16 contains a set of empirical papers by a set of global scholars who examine corporate governance and market regulation from a variety of perspectives.
Download or read book The Effects of Split Shares Reform on IPO Underpricing in China written by Rantao Hua and published by . This book was released on 2014 with total page 198 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis examines the impact of the split shares reform on IPO underpricing in China. I compare the effects of the changes in regard to three aspects of the Chinese stock market: government intervention, corporate governance in listed firms and changes in external market circumstances on IPO underpricing between the pre-split shares reform (pre-SSR) period from 2002 to 2005 and the post-split shares reform (post-SSR) period from 2006 to 2011, in order to investigate the effect of split shares reform on the changes of the degree of IPO underpricing from 2002 to 2011. Following the methodology of Liu and Xiong (2005), I find that during the pre-SSR period the government intervention and corporate governance in listed firms have no relationship and a positive relationship respectively with the degree of IPO underpricing, which is consistent with the extant literature. By contrast, during the post- SSR period, a positive relationship arises between government intervention and the degree of IPO underpricing, while there is a negative relationship between corporate governance and the degree of IPO underpricing. In terms of the external market circumstance, I speculate the market liquidity and scale of IPOs should be responsible for the unexpected results in both pre-SSR and post-SSR period. Additionally, I find strong evidence that the problem of a high degree of IPO underpricing has been reduced by the reform.
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 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 Equity Valuation Using Multiples written by Andreas Schreiner and published by Springer Science & Business Media. This book was released on 2009-04-15 with total page 191 pages. Available in PDF, EPUB and Kindle. Book excerpt: Andreas Schreiner examines the role of multiples in equity valuation. He transforms the standard multiples valuation method into a comprehensive framework for using multiples in valuation practice, which corresponds to economic theory and is consistent with the results of a broad empirical study of European and U.S. equity markets.
