Description : 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.
Description : Asia and the Pacific have become the growth engine of the world economy with the contribution of two-third of the global growth. The book discusses current issues in economics, business, and accounting in which economic agents, as individuals, entrepreneurs and professionals, as well as countries in the Asia and Pacific regions compete and collaborate with each other and with the rest of the globe. Areas covered in the book include economic development and sustainability, labor market competition, Islamic economic and business, marketing, finance, accounting standard compliances, and taxation. It will help shed light on what business and economic scholars in regions have done in terms of research and knowledge development, as well as the new frontiers of research that have been explored and opening up.
Description : After the cooling off of IPOs since the dot com bubble, Google has rekindled the fire for IPOs. This IPO reader contains new articles exclusive to this reader by leading academics from around the world dealing with quantitative and qualitative analyses of this increasingly popular and important area of finance. Articles address new methods of IPO performance, international IPOs, IPO evaluation, IPO underwriting, evaluation and bookbuilding. Although numerous articles are technical in nature, with econometric and statistical models, particular attention has been directed towards the understanding and the applicability of the results as well as theoretical development in this area. This reader will assist researchers, academics, and graduate students to further understand the latest research on IPOs. *Interest in IPOs is increasing again after the Google IPO, and IPOs are up significantly from last year *Chapters by well known academics provide an international perspective, describing research results from IPO data in countries spanning the globe *Research is based on real results from IPO data collected over the past 5-7 years
Description : Diploma Thesis from the year 2007 in the subject Business economics - Investment and Finance, grade: 1,3, European Business School - International University Schloss 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 Borse 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
Description : 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.
Description : Bachelor Thesis from the year 2019 in the subject Statistics, grade: 79, , language: English, abstract: This paper examines the behaviour of bidders in an initial public offering auction (IPO) when a seller is offering a perfectly divisible share to potential buyers. Due to the massive effect and news coverage IPOs have on the modern day economy, this paper aims to unearth some of the mystery behind such auctions. It focuses mostly on the behaviour of bidders in a complete and incomplete information setting, where a bidder's incentives change given their information and competition. Using the theoretical framework of the paper, I then apply the findings to the real world and comment on the realism of the models. Lastly, I recommend possible extensions to the models in order to bring a new dimension to the analysis. An initial public offering is a major stepping stone for any company as it evolves from a private to a publicly traded company. The process of going public is a complicated procedure, so they often solicit the help from an investment bank to help price the stock as well as find suitable investment. The purpose of an IPO is to help the selling company gather capital in order to expand operations. They do this by offering equity to potential investors in the form of a share which can be traded publicly via the necessary stock market. There are currently sixteen stock exchanges around world with a market capitalization of over $1 trillion each, the biggest being the New York Stock Exchange which has a market capitalization of over $28.5 trillion which is larger than the US gross domestic product for 2018. This paper hopes to shine some light on the process of taking a company public by unearthing a bidder's behaviour and incentives under a range of different situations. Applying auction theory to an initial public offering is relatively unexplored in economic journals, so this paper aims to extend work already presented in the literature and give insightful explanations to problems which have presented themselves to sellers and buyers. These problems include but are not limited to the peculiar situation in which it is common that the stock price at the end of the first day of trading for a newly publicised company is higher than its offering price. However, according to UBS, around 60% of IPOs provide investors with negative returns in their first five years, suggesting an extraordinary hype in first day trading compared to a more rational long term view.
Description : 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
Description : Frank Ecker examines the performance of U.S. initial public offerings (IPOs) from 1980 to 2002. He links positive and negative abnormal returns to the deviation of the realized information risk from the expected information risk. The author proposes effective measures for a long-term profitable investment strategy in IPOs.