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Author: Emanuele Bajo Publisher: ISBN: Category : Languages : en Pages : 65
Book Description
Using various “centrality” measures from Social Network Analysis (SNA), we analyze how the location of a lead IPO underwriter in its network of investment banks affects various IPO characteristics. We hypothesize that investment banking networks allow lead IPO underwriters to induce institutions to pay attention to the firms they take public and to perform two information-related roles during the IPO process: an information dissemination role, where the lead underwriter uses its investment banking network to disseminate noisy information about various aspects of the IPO firm to institutional investors; and an information extraction role, where the lead underwriter uses its investment banking network to extract information useful in pricing the IPO firm equity from institutional investors. Based on these two roles, we develop testable hypotheses relating lead IPO underwriter centrality to the IPO characteristics of firms they take public. We find that more central lead IPO underwriters are associated with larger absolute values of offer price revisions; greater IPO and after-market valuations; larger IPO initial returns; greater institutional investor equity holdings and analyst coverage immediately post-IPO; greater stock liquidity post-IPO; and better long-run stock returns. Using a hand-collected data set of pre-IPO media coverage as a proxy for investor attention, we show that an important channel through which more central lead IPO underwriters achieve favorable IPO characteristics is by attracting greater investor attention to the IPOs underwritten by them.
Author: Emanuele Bajo Publisher: ISBN: Category : Languages : en Pages : 65
Book Description
Using various “centrality” measures from Social Network Analysis (SNA), we analyze how the location of a lead IPO underwriter in its network of investment banks affects various IPO characteristics. We hypothesize that investment banking networks allow lead IPO underwriters to induce institutions to pay attention to the firms they take public and to perform two information-related roles during the IPO process: an information dissemination role, where the lead underwriter uses its investment banking network to disseminate noisy information about various aspects of the IPO firm to institutional investors; and an information extraction role, where the lead underwriter uses its investment banking network to extract information useful in pricing the IPO firm equity from institutional investors. Based on these two roles, we develop testable hypotheses relating lead IPO underwriter centrality to the IPO characteristics of firms they take public. We find that more central lead IPO underwriters are associated with larger absolute values of offer price revisions; greater IPO and after-market valuations; larger IPO initial returns; greater institutional investor equity holdings and analyst coverage immediately post-IPO; greater stock liquidity post-IPO; and better long-run stock returns. Using a hand-collected data set of pre-IPO media coverage as a proxy for investor attention, we show that an important channel through which more central lead IPO underwriters achieve favorable IPO characteristics is by attracting greater investor attention to the IPOs underwritten by them.
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: James K. Seward Publisher: ISBN: Category : Languages : en Pages :
Book Description
We use an empirical methodology known as path analysis to study the interrelationships in the premarket, issue date, and aftermarket underwriting activities of investment banks, as well as the impact of such activities on short-run and long-run investor returns in initial public offerings (IPOs). We also investigate the impact of investment bank reputation measures on the underwriting process and investor returns over short-run and long-run horizons. Overall, the results confirm that premarket, issue date, and aftermarket underwriter activities are significantly related. These activities are intended to mitigate the influence of private information available to investors about the true value of new issues.
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: Arif Khurshed Publisher: Harriman House Limited ISBN: 085719688X Category : Business & Economics Languages : en Pages : 105
Book Description
A fully revised and updated second edition of the essential guide that tells you everything you want to know about IPOs in the UK. An initial public offering (IPO) - the occasion when a firm's shares are issued to the public for the first time - is one of the most exciting events in the life of a company, providing new opportunities for the business, its managers and for investors. IPOs attract a lot of attention from stock market researchers, academics and investors seeking to understand more about how they work and how the shares of IPO companies perform once they are listed. In this second edition of Initial Public Offerings, Arif Khurshed delves into the history of IPOs on the London Stock Exchange, explains the mechanics of how IPOs are arranged and how they are priced, and provides an analysis - with detailed but lucid reference to past academic studies - of how the shares of IPO companies perform in the short and long term. The book provides valuable insight into many fundamental IPO matters, including: - the different methods of flotation that are used, - the alternative ways in which IPO shares are priced, - how common it is for IPO shares to over or underperform, - the survival of IPO firms once they are listed. There are also detailed case studies of the short- and long-run performance of a number of high-profile IPOs, including those of Facebook, Alibaba and Royal Mail. If you are an academic, finance professional or serious investor looking to broaden your knowledge of stock market flotations then you will find Initial Public Offerings to be an indispensable guide.
Author: Emanuele Bajo
Author: Emanuele Bajo
Author: Georgi Georgiev
Author: Katrina Louise Ellis
Author: James K. Seward
Author: Michelle Lowry
Author: Arif Khurshed
Author: Theodore Doron Sternberg
Author: William C. Johnson
Author: T. J. Jenkinson
Author: Steven E. Bochner