The authors compare the post-issue stock and operating performance of rights issue versus public offer firms using Korean data. The authors find that the stock returns of rights issue firms are less negative than those of public offering firms during the three years subsequent to the seasoned...

Given the prevalence of dual directors who serve simultaneously on the parent as well as the subsidiary board, it is important to examine their functions, a topic largely ignored in the existing literature. Exploring the functions of dual directors highlights equity carve-out objectives other...

The larger underpricing (15 percent) in the early years following the inauguration of Borsa Istanbul indicates the importance of investors, intermediaries, and firm insiders learning about the trading and pricing of firms in organized stock markets. The underpricing in recent years (from 2010 to...

This study sets out a new methodology to exemplify, through a set of risk metrics called the Greeks, impact of a bond’s structured provisions (e.g., call, put, and conversion options) on its risk characteristics and its propensity for agency conflicts. The methodology is assessed by applying...

Purpose: We investigate the impact of board diversity on initial public offering underpricing and firm value. Design/methodology/approach: We examine the relationship between board diversity and IPO underpricing by collecting data on the board size and composition of 470 IPOs listed on the Korea...

We analyze the interaction between management and investors during Chinese IPO roadshows through Jaccard Similarity analysis of written Chinese logograms. We provide evidence that when agreement is high, investor optimism increases, leading to relatively large first-day underpricing. We further...

This paper explores the role of social capital in contributing to the success of a new breed of organizations known as "blank check companies" or special purpose acquisition companies (SPACs) that are set up solely to target and acquire listed companies as a fast-track route to gain listing...

Research Question: This study is a preliminary attempt to investigate the effects of technology and R&D expenditure and the moderating effect of venture capital through the interaction of technology and R&D on the underpricing of IPOs in China’s A-share market. Motivation: The role of...

We examine the impact of internationalization on IPO underpricing in China. Our findings, which suggest that internationalization can reduce IPO underpricing, echoes similar findings in the literature. However, we document that the transmission channel is not consistent with a diversification...

We study innovation in newly public firms and find that VC-backing negatively impacts patent production and citations within the initial years of an IPO. Finding this effect to be more pronounced at firms with higher innovation activity pre-IPO, we conclude that this adverse impact is a...

The structure of a special purpose acquisition company (SPAC) provides a special role for its sponsors. We show that while few characteristics can explain SPACs' returns, sponsors' connections and network, measured by their centrality, explain a large portion of return variation in the...

We examine firm disclosure choice during the initial public offering (IPO) roadshow presentation to examine the informativeness of a management presentation designed to attract investors. While firms must submit a comprehensive registration filing during the IPO, investors convey strong interest...

This paper examines the impact of cross-country variation in shareholders' and debt holders' rights on post-IPO performance and survival of newly listed stocks across the globe. Using a sample of 10,490 initial public offerings (IPOs) in 40 countries between 2000 and 2013, we find that post-IPO...

Special Purpose Acquisition Companies (“SPACs”) are shell companies formed for the purpose of acquiring an existing operating company. A typical characteristic of a SPAC is that it has no specific business plan at the time of establishment or that it is still unclear of its target company. A...

In this Closer Look, we examine a new industry that has arisen in recent years to facilitate the financing of stock-option exercises for employees and executives of pre-IPO companies. These capital providers allow individuals to exercise and retain their stock option awards, meaning the employee...

The literature on strategic alliances generally suggests that such alliances create benefits for the firms involved. However, these studies primarily focus on seasoned firms. Leveraging the availability of three years of pre-IPO data for Chinese firms, we examine the impact of customer strategic...

We posit that IPOs of local companies will lead to increased stock market participation. First, local IPOs attract attention to the market, through both increased information production and publicity. Second, local IPOs generate wealth, not just for people associated with the heretofore private...

This study aims to find out what determinants have the most influence in improving bank operational performance, including profitefficiency policies or debt securities issuance. Profit efficiency policy is proxied by net interest margin, which describes the input and outputof the bank’s...

We examine the price discovery process of initial public offerings (IPOs) from the offer price to the first day’s open price. Stock exchanges have made major changes to the IPO preopening process, and introduced an open auction process in which all investors are able to enter orders and...

This study attempts to examine the impact of social media attention and sentiment on IPO pricing. Specifically, by using social media sentiment as a proxy for retail investors’ valuation, I attempt to examine the theoretical predictions in prior studies (Ljungqvist, Nanda and Sigh (2006),...

The IPO process involves a large amount of information delivered to the public through different means. Information frictions may be what causes most of the underpricing. Socially conscious investors supposedly use the ESG criteria to check for potential investments. Thus, we argue that...

We study how institutional investors utilize potentially biased information by analyzing the effect of IPO underwriters' earnings forecasts on investors' bidding behaviors in Chinese IPO auctions. Despite the presence of upward biases in underwriters' earnings forecasts, we nd that investors'...

We study the relative usefulness of earnings announcements for valuation from the perspective of information externalities–the use of peer information in IPO pricing. The relative usefulness of an information source for peer valuation is a function of both the amount and the per-unit...

This study covers 45 investee companies that were funded by PE firms during the period from June, 2000 to December, 2015. We have followed the Long-Nickels PME method, to estimate IRR and evaluate the performance of PE investment compared to market index. We found that, India is showing an...

We document the frequent use of stock lockup agreements in mergers and acquisitions (M&As) paid in stock and examine the corporate determinants and consequences of lockups’ use and duration. Lockup agreements prohibit target shareholders from selling shares issued by the acquirer as means of...

Although founders are often replaced with external CEOs prior to firms making IPOs, firms that do retain founder CEOs generally perform better at IPO. However, this relationship may be contingent upon context. This study investigates how national context influences the relationship between a...

We explain the returns obtained on venture capital (VC) investments in all VC backed companies going public in the U.S. between 2003 and 2017. Using a unique data set of 1,921 investor-IPO returns, we show that later investments obtain higher returns, even after controlling for observed and...

Special Purpose Acquisition Company (SPAC) IPOs boomed starting in 2020. While SPAC IPO investors have earned 12.0% per year, returns for investors in merged companies are more complex. They have earned -7.3% in the first year on common shares but 64.4% on warrants. We rationalize why certain...

We study why capital asset markets in which buyers pay too much, well in excess of the asset’s long-term equilibrium price, could exist. A well-known example is the initial pricing of IPO shares. Two mechanisms that could generate an artificial short-term temporary demand for the asset are...

This paper provides a unified explanation for the existence, time-series variation, and recent boom of the Special Purpose Acquisition Company (SPAC). We begin by documenting four empirical patterns regarding U.S. SPACs: (1) SPAC issuance boomed in 2007 prior to the Global Financial Crisis and...

In this paper, we find that the conflict of interest between loan holders and bondholders is positively related to bond IPO underpricing, which serves as a compensation to the initial bond investors. We construct four proxies for the conflict between loan holders and bondholders, namely, a loan...

Listing markets have different cultural backgrounds and experience different economic development. This study examines the impact of cultural values and the moderating effect of economic growth on IPO underpricing issued by Chinese companies in different stock markets. Using a sample of 2429...

The purpose of the study is the analysis of the relationship between the par value (also known as nominal value or face value) and the parameters influencing a company's financing. Additionally, the utility of the par value as a manipulation tool for equity offerings is examined. The study is...

One of the IPO-related anomalies that have been well-discussed in the finance literature is the IPO's long-running underperformance. Two of the major explanations of that phenomenon are: "Hot market" and earnings management. This study investigates the relative importance of these two...

We investigate how intangible assets in the form of R&D influence firms' hazards of engaging in international acquisitions. On the one hand, previous research has noted that the tacit and redeployable nature of R&D investments may prompt firms to expand their operations overseas and create value...

This paper considers a financing problem for an innovative firm that is launching a web-based platform. The entrepreneur, on one hand, faces a large degree of demand uncertainty on his product and on the other hand has to deal with incentive problems of professional blockchain participants who...

The seasoned equity offering (SEO) market plays a significant role in the economic development of a country by providing liquidity for ongoing commercialization and innovation. This study is a comprehensive analysis of 149 SEOs and their effect on share prices in Thailand between 2009 and 2019....

Purpose - The objectives of this study are twofold. First, it intends to investigate the symmetric link between initial public offering (IPO) variability and the determinants of the stock market index, treasury bill rate, inflation, GDP growth rate and foreign direct investment. Second, this...