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Author: Jonas Wieckert Publisher: ISBN: Category : Languages : en Pages :
Book Description
This thesis investigates the relation between underpricing and equity underwriter reputation in the Swiss market. It examines a handpicked sample of 109 IPOs that took place between 1997 and 2017. The examination finds that there was average underpricing of around eight percent for the sample period. However, the underpricing varies vastly over the sample. The initial years see high underpricing of around twelve percent, whereas since 2008, underpricing has been below six percent on average. This is somewhat lower than the underpricing found in earlier Swiss studies from the 1980s and 1990s. Considering the global trend of lower initial returns this is perfectly expectable and consistent. The results of the regression analysis to determine the impact of reputation on underpricing were mixed. Depending on the method of measurement and significance level the impact varied from statistically insignificant to positive and negative. These findings are interpreted in a way that suggests that a weighted market share approach is the best way to measure underwriter reputation in the small Swiss market. Such an interpretation means that increasing underwriter reputation does indeed lead to lower underpricing. To give the regression model more accuracy, a set of additional explanatory variables had to be included in the analysis as well. Around half of them did not perform in the way that was initially predicted. But none of them behaved in a completely inexplicable way that is completely inconsistent with pre-existing literature. Better underwriter reputation was found to reduce underpricing, but the explanatory variables of logarithmised gross proceeds and syndicate size had an even stronger coefficient. While the empirical results were mixed, this paper also contributes to the literature by offering the first underwriter ranking for the Swiss market.
Author: Jonas Wieckert Publisher: ISBN: Category : Languages : en Pages :
Book Description
This thesis investigates the relation between underpricing and equity underwriter reputation in the Swiss market. It examines a handpicked sample of 109 IPOs that took place between 1997 and 2017. The examination finds that there was average underpricing of around eight percent for the sample period. However, the underpricing varies vastly over the sample. The initial years see high underpricing of around twelve percent, whereas since 2008, underpricing has been below six percent on average. This is somewhat lower than the underpricing found in earlier Swiss studies from the 1980s and 1990s. Considering the global trend of lower initial returns this is perfectly expectable and consistent. The results of the regression analysis to determine the impact of reputation on underpricing were mixed. Depending on the method of measurement and significance level the impact varied from statistically insignificant to positive and negative. These findings are interpreted in a way that suggests that a weighted market share approach is the best way to measure underwriter reputation in the small Swiss market. Such an interpretation means that increasing underwriter reputation does indeed lead to lower underpricing. To give the regression model more accuracy, a set of additional explanatory variables had to be included in the analysis as well. Around half of them did not perform in the way that was initially predicted. But none of them behaved in a completely inexplicable way that is completely inconsistent with pre-existing literature. Better underwriter reputation was found to reduce underpricing, but the explanatory variables of logarithmised gross proceeds and syndicate size had an even stronger coefficient. While the empirical results were mixed, this paper also contributes to the literature by offering the first underwriter ranking for the Swiss market.
Author: Ricardo Falter Publisher: GRIN Verlag ISBN: 3656558396 Category : Business & Economics Languages : en Pages : 20
Book Description
Bachelor Thesis from the year 2013 in the subject Business economics - Investment and Finance, grade: 8,0, Maastricht University (School of Business and Economics), language: English, abstract: This paper will try to elaborate on the different and sometimes mixed empirical results, testing the relationship between underwriter’s reputation and the price of the capital issue. Firstly, the two most cited and used ways of measuring reputation will be explained. Secondly, the relationship between reputation and issue pricing will be analysed from different perspectives. Thirdly, the existence of a relationship between reputation and fees as well as between reputation and proceeds will be proven. After that commercial and investment banks as underwriters will be compared and it will be shown that there are reasons to choose a commercial bank as an underwriter. Finally, the mechanics of how underwriters are being chosen and the reasons for switching underwriters will be analysed, before ending this study with a conclusion.
Author: Tim Jenkinson Publisher: Oxford University Press, USA ISBN: 9780198295990 Category : Business & Economics Languages : en Pages : 264
Book Description
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.
Author: Georgi Georgiev Publisher: GRIN Verlag ISBN: 3656208905 Category : Business & Economics Languages : en Pages : 89
Book Description
Bachelor Thesis from the year 2005 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,7, Martin Luther University, 38 entries in the bibliography, language: English, abstract: The world of finance is complex. There are many aspects, which cannot be fully explained and still confuse the researchers. One of the most discussed topics is that of Initial Public Offerings (IPO) mainly because of the intricate connections between investment bankers (underwriters), issuers and buyers. This paper will try to summarize the whole process of going public and emphasize on the role of the (lead) underwriter in it. The paper discusses mainly the American "way" of going public, but the procedure is generally the same for the European market with some differences that are explained in the text. The advantages, disadvantages and the legal requirements for going public are enlightened, in order of understanding the important role, which the underwriter plays in the whole process. The structure and the legal consequences of the due diligence process are presented. The types of agreement between the underwriter and the issuer are described, with the consequences that originate from them. The ways of determining the price and the advantages and disadvantages of any of them are presented, with respect to the importance of the underwriter's role in them and the liabilities that she has. The problem with the underpricing is discussed more detailed, since this is one of the big challenges in the IPO process. Some theories that explain this phenomenon are briefly discussed, showing the mechanism that is behind the underpricing problem. Some of the unlawful allocation practices are listed, with examples that show that even the top underwriters use prohibited actions to ensure the successful completion of the IPO process. The importance of the pre-opening period for the determination of the right market price and the active participation of the underw
Author: Michelle Lowry Publisher: ISBN: 9781680833416 Category : Electronic books Languages : en Pages : 166
Book Description
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.
Author: Alberto Chong Publisher: World Bank Publications ISBN: 0821369148 Category : Business & Economics Languages : en Pages : 584
Book Description
'Investor Protection and Corporate Governance' analyzes the impact of corporate governance on firm performance and valuation. Using unique datasets gathered at the firm-level the first such data in the region and results from a homogeneous corporate governance questionnaire, the book examines corporate governance characteristics, ownership structures, dividend policies, and performance measures. The book's analysis reveals the very high levels of ownership and voting rights concentrations and monolithic governance structures in the largest samples of Latin American companies up to now, and new data emphasize the importance of specific characteristics of the investor protection regimes in several Latin American countries. By and large, those firms with better governance measures across several dimensions are granted higher valuations and thus lower cost of capital. This title will be useful to researchers, policy makers, government officials, and other professionals involved in corporate governance, economic policy, and business finance, law, and management.
Author: Ricardo Falter Publisher: ISBN: 9783656558347 Category : Languages : en Pages : 24
Book Description
Bachelor Thesis from the year 2013 in the subject Business economics - Investment and Finance, grade: 8,0, Maastricht University (School of Business and Economics), language: English, abstract: This paper will try to elaborate on the different and sometimes mixed empirical results, testing the relationship between underwriter's reputation and the price of the capital issue. Firstly, the two most cited and used ways of measuring reputation will be explained. Secondly, the relationship between reputation and issue pricing will be analysed from different perspectives. Thirdly, the existence of a relationship between reputation and fees as well as between reputation and proceeds will be proven. After that commercial and investment banks as underwriters will be compared and it will be shown that there are reasons to choose a commercial bank as an underwriter. Finally, the mechanics of how underwriters are being chosen and the reasons for switching underwriters will be analysed, before ending this study with a conclusion.
Author: Justyna Dietrich Publisher: Diplomica Verlag ISBN: 3842872895 Category : Business & Economics Languages : en Pages : 81
Book 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.
Author: Jonas Wieckert
Author: Jonas Wieckert
Author: Jing Liu
Author: Ricardo Falter
Author: Tim Jenkinson
Author: Georgi Georgiev
Author: Michelle Lowry
Author: Amy Yeng Sian Teoh
Author: Alberto Chong
Author: Ricardo Falter
Author: Justyna Dietrich