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Author: Tim Meierkord Publisher: GRIN Verlag ISBN: 3668367493 Category : Business & Economics Languages : en Pages : 23
Book Description
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.
Author: Tim Meierkord Publisher: GRIN Verlag ISBN: 3668367493 Category : Business & Economics Languages : en Pages : 23
Book Description
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.
Author: Richardson Steve Publisher: GRIN Verlag ISBN: 3656426287 Category : Business & Economics Languages : de Pages : 66
Book Description
Bachelorarbeit aus dem Jahr 2012 im Fachbereich BWL - Unternehmensführung, Management, Organisation, Note: A, University of Massachusetts Boston, Sprache: Deutsch, Abstract: In these current times of the dotcom mania, an investor can throw a lot of funds into a particular IPO and be guaranteed disappointing returns. Majority of companies such as theglobe.com and VA Linux saw big 1st day profits but disappointed their investors in the long run. Nevertheless, companies that had the foresight of the ‘get in and out’ risks involved in an IPO made investing look simpler. However, no investment is always a sure deal and investors are today making focus on the long term gain rather than the ‘quick buck.’ Notwithstanding the current mega economic upshots not only in Saudi Arabia but also in the worlds largest economies; a company contemplating going public must prepare itself for the IPO transactions, steer the business to immense success and most importantly, analyze the risks involved in a bid to minimize them and cultivate some worthy investment for the company in the dynamic market. Going public is not easy but the rewards are monumental and the keys are knowing the risks and finding a way to minimize them. Making investment decisions is quite complex and cannot be taken as a precise science. Nevertheless, estimating and understanding the portfolio framework for investment decisions in the context of foreign investments is one critical task that every nation is endowed with. Carefully made investment decisions answers the questions of whether a country has the financial muscle to breed cash flow and a portfolio framework that will be enough to maintain a long term investment. With all this said and done, one will be sure to come up with a good portfolio framework for investment in their context foreign investments.
Author: Habiba Mrissa Bouden Publisher: ISBN: Category : Languages : en Pages : 165
Book Description
This thesis contains three articles examining the impact of risk on three anomalies associated with the IPO market. These anomalies are: (1) the phenomenon of "hot-issue market", (2) the underpricing and (3) the long-run underperformance. We use a new approach that decomposes the total risk at the firm as well as the IPO market levels into: (1) a systematic risk component associated with common risk factors of the market and (2) an idiosyncratic risk component tied with firm specific risk factors and used as a proxy for the information asymmetry level. In addition, we use market implied volatility to assess the impact of market-wide uncertainty on IPO activity. Our objective is to reveal which risk component is involved in the IPO cycles (Paper 1), the short-run (Paper 2) as well as the long-run (Paper 3) IPO pricing process. The first paper characterizes the role of risk in IPO cycles. We aim to study IPO cycles not only in terms of IPO volume and initial returns but also in terms of issuing firm's risks with both systematic and idiosyncratic components. We show the important role of the market-wide risk to anticipate IPO's waves and the level of the idiosyncratic risk of future issues. Moreover, we show that systematic risk is positively correlated across issuing firms. The predictability of IPO waves and the specific risk level of future new issues helps: (1) regulators to improve rules accordingly, (2) investors to make better IPO investment's decisions and (3) issuers to align their IPO timing with market receptivity. The second paper evaluates the impact of both risk components (systematic and idiosyncratic) at the issuing firm as well as the IPO market levels on the IPO pricing by the underwriters during the period of registration on the one hand and by the investors in the early aftermarket stage on the other hand. Our results show that underwriters tend to undervalue IPOs compared to similar non-IPOs equities (controlling for the industry, sales, profitability and growth), when considering the idiosyncratic risk at the IPO market level during the registration period. For post-IPO valuation, we find that idiosyncratic risk of the issuing firm is not incorporated into the market price of overvalued IPOs only. We conclude that IPO mispricing is mainly attributed to the non-incorporation of the idiosyncratic risk component into IPO prices. The third paper examines the long-run abnormal performance of IPOs versus comparable non-IPOs equities by using a new perspective that distinguishes between the systematic and idiosyncratic risk components of the firm. Our findings show that IPOs exhibit higher levels of systematic and idiosyncratic risks than their matched peers. Unlike non-issuing firms, we show a significant downward trend in IPO idiosyncratic risk during the first three years of seasoning. However, the IPO systematic risk component exhibits a slight upward trend over time. We also show that the apparent IPO underperformance is just a reflection of a lower risk volatility exposure for IPOs relative to similar non-issuing firms. Moreover, we find more pronounced long-run underperformance, especially for IPOs with high idiosyncratic risk, technology firms and hot-IPOs. This thesis contributes to the IPO literature by highlighting the relevance of our approach that adopts the decomposition of risk in order to understand some mixed findings in the literature about the three anomalies of the IPO's market.
Author: Frank Ecker Publisher: Springer Science & Business Media ISBN: 3834981176 Category : Business & Economics Languages : en Pages : 146
Book 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.
Author: United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs. Subcommittee on Securities, Insurance, and Investment Publisher: ISBN: Category : Going public (Securities) Languages : en Pages : 44
Author: Rolf J. Daxhammer Publisher: UVK Verlag ISBN: 3739801727 Category : Business & Economics Languages : de Pages : 243
Book Description
In a corporations financial life going public by means of an IPO is probably the single most important decision. It turns a private company into a public one. Our book will provide an inside view of the IPO process. On the one hand, it draws on the insights of an experienced investment banker, who has gone through numerous IPO transactions. On the other hand, it relates the story of an actual IPO through the eyes of a Chief Executive Officer who has taken two of his companies public. This unique double perspective is our books defining feature. We do not discuss initial public offerings in a textbook style fashion. What we would like to bring out is a more comprehensive portrayal of a once-in-a-lifetime event for most companies and their management, alike.
Author: Christine Hurt Publisher: ISBN: Category : Languages : en Pages : 76
Book Description
Although intense scrutiny has been focused recently on investment banks, initial public offerings, research analysts, and market makers, regulatory reforms have stopped short at criticizing wholesale the initial public offering process in the United States. This paper argues that the bookbuilding process, the almost exclusive method of distributing IPO shares in the U.S., is the root cause of the abuses that occurred in the IPO market in the 1999-2000 bubble. Although investors have tended to view an IPO led by a Wall Street firm as an attractive product with a trusted brand name attached, these firms were taking issuers with questionable potential to the market, gleaning profits for their cronies and customers, then leaving the retail investors to sell their shares after the market reached equilibrium below the original IPO share price. To place the customary practices of the IPO industry in context, this paper compares the legal practices of Wall Street investment banks that restrict supply and create artificial demand to illegal pump-and-dump schemes conducted by fly-by-night brokerage houses. In the bookbuilding process, agency problems and conflicts of interest abound between and among the participants, including the underwriter, the issuer, the founders, the institutional investors, the analysts, and the retail investors. The moral hazard created by these agency problems results in the underwriter manipulating the IPO market for the purpose of benefiting regular customers and potential investment banking clients. The most extreme abuses involve underwriters allocating IPO shares in return for outrageously excessive commissions. In addition, the founders' own self-interest causes them to manipulate the IPO market for the benefit of themselves, their relatives and friends, and the company's potential allies.To improve the IPO process in the U.S., regulatory institutions should abolish the bookbuilding system in favor of more transparent, democratic processes, such as the Internet auction. The Google IPO will utilize a Dutch auction system and represents an issuer-led sea change in the IPO process. However, few, if any, issuers have the market power of Google to negotiate with investment banks to change the traditional IPO process. Without regulatory reform, the bookbuilding process, which benefits the investment banks to the detriment of the retail investor, will continue to dominate the U.S. IPO market.
Author: Marius Hamer Publisher: GRIN Verlag ISBN: 3638903699 Category : Business & Economics Languages : en Pages : 73
Book Description
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.
Author: Philippe Espinasse Publisher: Hong Kong University Press ISBN: 9888455842 Category : Business & Economics Languages : en Pages : 257
Book Description
In this groundbreaking guide, former investment banker Philippe Espinasse explains the process of gathering cornerstone investors in connection with IPOs and other equity offerings. Using his trademark simple and jargon-free language, he details the targeting strategies, documentation, marketing, and allocation of shares and other securities to these reference shareholders, and analyses why and how they make or break today’s new listings across Asia’s key markets. This essential guide—and the first of its kind—contains key information on the legal framework for cornerstone investors in Hong Kong, Malaysia, and Singapore, and offers practical advice on how best to structure and conduct a cornerstone investor offering. It also discusses some of the more controversial issues associated with the practice of cornerstone investment and includes many real-life examples of cornerstone deals, sample documents, cornerstone investor profiles, an investor target list, and a comprehensive glossary. ‘There is no better person to shed light on the opaque world of cornerstone investing in Asian IPOs. Philippe Espinasse writes clearly, substantively, and expertly.’ —Jasper Moiseiwitsch, Asia companies and markets news editor, Financial Times ‘As engaging as it is informative. Espinasse has cut through legalese and jargon to create a pragmatic overview of this widely misunderstood, and distinctly Asian, investment banking concept. Packed with recent examples, this book doesn’t just teach you about cornerstones; it also provides an insider’s take of the region’s capital markets hubs.’ —Danielle Myles, capital markets editor, The Banker ‘Cornerstone investors have taken centre stage in Hong Kong’s IPO market. This book is needed now more than ever.’ —Matthew Thomas, Asia bureau chief, Euromoney Institutional Investor
Author: Tim Meierkord
Author: Tim Meierkord
Author: Richardson Steve
Author: Habiba Mrissa Bouden
Author: Frank Ecker
Author: Quanshui Zhao
Author: United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs. Subcommittee on Securities, Insurance, and Investment
Author: Rolf J. Daxhammer
Author: Christine Hurt
Author: Marius Hamer
Author: Philippe Espinasse