Top PDF The impact of hyped IPO\u27s on the market

The impact of hyped IPO\u27s on the market

The impact of hyped IPO\u27s on the market

available back to January 2004. So, I exclude all IPOs before then. To focus on large, liquid, and relatively popular IPOs, I limit this study to IPOs on the large public markets, filtering out the IPOs that trade over-the-counter. This leaves the IPOs on the New York Stock Exchange (NYSE), American Stock Exchange (AMEX), NASDAQ, and the NASDAQ Global Market. Finally, I filter out the IPOs whose ticker symbol are common words (e.g., fly, hire, news, too, face, club and tree, see Table 2 for a complete list of the deleted tickers). These words could skew the

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The Impact of IPO on the Secondary Stock Market—An Empirical Research

The Impact of IPO on the Secondary Stock Market—An Empirical Research

From the experience of mature Western markets, the registration system also has strict regulatory substance content. In order to achieve the purpose of regulation of market expansion rhythm, registration system usually combines with queuing system. Only when the market is relatively mature, the scale reaches a certain depth, the case of the issue size is relatively small impact on the operation of the market, and then the regulatory authori- ties will modify the queuing system to the practice of self-registered. Before the United States introduced cup- board shelf registration system in 1982, the registration system had implemented for nearly half a century. The regulatory authorities also have full control authority on the issue of rhythm so its IPO speed is not fast. There- fore, you cannot equate registration system with regulators not to carry on the examination as to substance. The substantive examination has difference between channels and means for examination. Registration system does not mean that regulators be fully liberalized on the IPO rhythm control. In other words, China Securities Regu- latory Commission can give up right to examine and approve, but should have line up right. It was also real right not imaginary.
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The Impact on IPO Assurance Fees of Commercial Bank Entry into the Equity Underwriting Market

The Impact on IPO Assurance Fees of Commercial Bank Entry into the Equity Underwriting Market

In equation (1), ACCTFEE is the log of the fees paid to the accounting firm associated with the IPO. Like Willenborg (1999) and Beatty (1993), we include the log of pre-IPO total assets (ASSETS) as a general proxy for the effort required in the audit engagement. We also include the log of the IPO issue size (PROCEEDS) to control for the implicit insurance coverage provided by the auditor (Willenborg 1999). Both ASSETS and PROCEEDS also serve to control for the impact of issue size on fees. The next three variables serve as risk proxies. INVREC (DEBT) represents the firm’s inventories and receivables (total liabilities) scaled by total assets in the year prior to the IPO. If auditors charge a premium for firms with greater balance-sheet risk, then the coefficients for INVREC and DEBT should be positive. We also include STDRET, calculated as the one-year post-IPO standard deviation of common stock returns, as a proxy for the market’s perception of IPO firm risk. Although we expect the coefficient for STDRET to be positive as well, we acknowledge that the (necessarily) ex post nature of this variable renders it more noisy than the other two measures.
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Who\u27s Afraid of the Patent Trolls? Assessing the Market Impact of Landmark Patent Troll Litigation Outcomes

Who\u27s Afraid of the Patent Trolls? Assessing the Market Impact of Landmark Patent Troll Litigation Outcomes

litigation, that seem to be turning points in the relative success of patent troll litigation. These are the NTP v. RIM and eBay v. Mercexchange cases. Because these cases have had multiple appeals and court rulings, there are several options in terms of dates to test for statistical significance. These include August 5, 2003, which is the first unexpected pro-troll outcome of the NTP v. RIM case, and May 15, 2006, which is the pro-troll Supreme Court ruling in the eBay v. Mercexchange case. In general, I expect that rulings in favor of patent trolls for injunctions and/or large royalty fees should have a negative impact on the market value (measured by stock price) of the defendant technology firm, as well as other firms in a similar industry. In order to test this hypothesis, I will conduct event studies on the abovementioned case dates to determine whether litigation outcomes significantly impact market value of potential targets for future troll litigation. The methodology for my event studies is derived from Filson and Oweis (2010), which is based on the original event study methodology work by MacKinlay (1997).
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Market-Wide Impact of the Disposition Effect: Evidence from IPO Trading Volume

Market-Wide Impact of the Disposition Effect: Evidence from IPO Trading Volume

perform a ‘first order’ test for the market implications of the disposition effect: Trading volume should be higher when the stock is trading above the offer price vs. trading below the offer price, if investors are reluctant to trade lossmaking shares. Further, the immediate effect should be seen when the market price of an IPO with a negative initial return exceeds the offer price for the first time. If the disposition effect is significant enough to affect asset pricing, it should show up in trading volume. Conversely, if the disposition effect is not an important determinant of trading volume, its asset pricing implications are probably not significant. Ferris, Haugen, and Makhija (1988) find that the trading volume that occurs when a stock is trading in a particular price range is an important determinant of future trading volume for that stock in the price range in question. Ferris at al. interpret their findings as supporting the disposition effect. Grinblatt and Han (2002) find that stocks with large aggregate unrealized capital gains perform better than those with large unrealized capital losses. This is consistent with their equilibrium model of rational and disposition investors.
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The Impact on IPO Performance of Reforming IPO Allocation Regulations: An Event Study of Shanghai Stock Exchange A-Shares

The Impact on IPO Performance of Reforming IPO Allocation Regulations: An Event Study of Shanghai Stock Exchange A-Shares

i High equity retention by the state, government control and restricted IPO supply. The Chinese government has a large equity holding in state-owned enterprises – shares not tradable on the stock market but constituting the major part of all outstanding stock. A reduction in government ownership would promote stock market growth but this has still to be implemented. Until this problem is resolved the supply of IPOs to the market may be seriously limited. For example, although investment banks were introduced to the IPO approval process in order to certify IPO quality after the 2001 IPO policy change, the aggregate IPO supply remains largely in the control of government. Furthermore, because the Chinese stock market is still relatively undeveloped and there are limited investment instruments, IPO supply is barely able to meet investment demand. Basu and Li (2000) have also argued that bureaucrats possess inside information about which companies would be most likely to succeed, so that underpricing is used to compensate outsiders and to signal a trustworthy future.
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The impact of investor sentiment on IPO underpricing

The impact of investor sentiment on IPO underpricing

This table summarizes the result of using alternative definition of abnormal order flow. Column [1] uses matching-firm approach, in which ANetBuy_Match equals to the netbuy of IPOs by small investors on the first trading date in TAQ minus the netbuy of matching firm by small investors on the same date. The matching firms are found following Purnanadan and Swaminathan (2004), as those in Table 3. In column [2], netbuy is standardized to represent the firm-specific investor sentiment on the IPO firms. NetBuy_Standardize equals to the netbuy of the IPO firm deflated by the sum of buy and sell orders of the IPO firm. The dependent variable is underpricing, which is the percentage change in the price between the offer price and the first-day closing price. ICSR is the market wide sentiment measure from the Index of Consumer Sentiment constructed by University of Michigan Survey Research Centre, orthogonalized on macroeconomic variables. Revision + equals to one if the Revision is positive, zero otherwise. MaxRank is the maximum of all the lead managers’ ranks. MaxRank_BF1990 equals to MaxRank if the IPO is issued before 1990, zero otherwise. HiTech equals to one if the IPO firm is in high tech industry, zero otherwise. Venture equals to one if the IPO firm is backed by venture capitalists, zero otherwise. Nasdaq equals to one if the IPO is listed on Nasdaq, zero otherwise. Age is the number of years between the founding year and the IPO year. DecShrOffer takes the values from 1 to 10, by ranking ShrOffer into deciles for the IPOs in the same year. ShrOffer is the number of shares offered in the IPO, in millions. Sales is the sales for the prior fiscal year before offering from Compustat, in billion. Year is the IPO issue year. *, ** and *** represents the 10%, 5% and 1% significance level respectively. t-statistics are included below the coefficients.
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Market integration, country institutions and IPO underpricing

Market integration, country institutions and IPO underpricing

Our findings provide issuers, underwriters and investors some insights into the role that country institutional settings play in IPO markets and how this role can be altered by improvements in market integration. Firstly, as financial integration decreases the cost of IPOs associated with underpricing and increases the capital that the issuing company can raise, it gives issuers incentives to seek more financially integrated markets for listings. Secondly, the dynamic relationship between market integration, country institutions and IPO performance is particularly informative for foreign IPO investors and issuers who consider cross-border listings to either avoid or take advantage of certain institutional characteristics. Thirdly, as emerging markets are more sensitive to the globalization process, this provides valuable implications for policy makers regarding the impact of market integration on domestic financial development as well as corporate activities. While financial integration helps to improve the efficiency of the domestic market, it also provides domestic companies with opportunities to choose foreign capital by reducing constraints from institutional settings, e.g. legal frameworks. Therefore, a sustainable development would be linked to an improvement in the institutional settings and legal framework while taking advantage of the integration process.
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What determines IPO underpricing ? Evidence from a frontier market

What determines IPO underpricing ? Evidence from a frontier market

On one hand, this may be attributed to the presence of a high number of ipoers who are only interested in short run performance of the share. On the other hand, it appears that Tunisian investors are sceptical about the value of information disclosed on IPO’s prospectus. In fact, firms, particularly in Tunisia, are known to intensively proceed to window dressing prior to going public. To investigate the robustness of our results, we introduced two control variables to account for the possible impact of the participation of institutional investors in IPO’s and the existence of liquidity contracts on the level of underpricing. First, the direction and significance of the coefficient estimates for the basic model (model 1) remain unchanged for the three measures of initial underpricing. Second, the presence of institutional investors does not seem to act as a sort of “certification” of the value of the company, reducing uncertainty and therefore producing a lower level of underpricing. Our results are inconsistent with those of Ljungqvist et al. (2006).
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Size and diversity in VC syndicates and their impact on IPO performance

Size and diversity in VC syndicates and their impact on IPO performance

Panel A reports the descriptive statistics of 1424 VC-backed IPOs completed during 1985-2012. Underpricing is defined by the ratio of difference between first available closing stock price and offer price to offer price and divided by 100. VCTotal is the number of distinct VCs that provide capital before the IPO date. RoundVCSize is the mean number of distinct VCs that provide capital per round. VCDivIndex is an index which is total number of (i) different VC types within the syndicate (e.g. private, investment bank or corporate VC), (ii) different industry preferences of syndicating VCs, (iii) different nationalities of participating VCs and (iv) age brackets of VC firms. VCDivPCA is the principal component calculated based on four dimensions that we used for computing diversity index. VCLarge is one if the diversity index of the syndicate is larger than 4, the median of the sample. LeadVCRep is the lead VC’s IPO market share during the three-year period before the first investment round. Sales stand for company size and represent net company sales (in millions) in the fiscal year before issuance. Age is the difference between year of IPO date and the year of date when the company is incorporated. Proceeds is the offer size in terms of net proceeds. Rank is from Loughran and Ritter underwriter rank classification. Internet is equal to one if the IPO firm is identified as internet company in the database complied by J. Ritter. Nasdaq takes value one if the firm is listed in Nasdaq and zero otherwise. Market Return is defined as mean value-weighted CRSP index return over the month before the issue date. Above takes value one if the IPO is priced above the original filing price range and zero otherwise.
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Impact of legal institutions on IPO survival: A global perspective

Impact of legal institutions on IPO survival: A global perspective

Table 2: Results for the AFT model using the logarithm of the survival time as a dependent variable and set of IPO characteristics, quality of the legal system and market conditions as explanatory and control variables. IPO firms are classified as survivors if they continue to trade on the stock market or move to a different market. M&A delistings of well-performing companies are classified as censored survivors if they rank above median based on all of the following three company performance measures in the year prior to the M&A delisting: cash to total assets, total liability to total asset and operating income to total asset. The results are reported for the pooled sample of all 32 countries together, and separately for each of the four regions: North America, Europe, BRICS, and Asia-Pacific. We control for year and industry fixed effects, and robust standard errors are clustered by country. For the detailed definition and construction of the variables, please refer to the Appendix A1. We report the coefficients and the time ratios (TR). ***,**,* indicate significance at 1%, 5% and 10%, respectively.
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1. To study Influence of IPO Rating on demand in Indian IPO market in special context to Retail Investors.

1. To study Influence of IPO Rating on demand in Indian IPO market in special context to Retail Investors.

Abstract: IPO demand is influenced by IPO signaling parameter as Investment Banker, Underwriter, Venture Capitalist involvement, Business Group affiliation, Grading, Underpricing or Issue Size, Market timing as Bullish or Bearish etc. Many research has evolved around it. The Research paper tries to examine the impact of IPO Rating by Capital market, the significance of it on IPO subscription or demand. The paper tries to understand significance of IPO rating in terms of Investors behavior and does it tends to influence demand of retail investor by helping in decision making, in Indian IPO market which has institutional voids and information asymmetry.
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IPO Underpricing and Predictive Power of Board Related Corporate Governance Mechanisms: A Study of Indian IPO Market

IPO Underpricing and Predictive Power of Board Related Corporate Governance Mechanisms: A Study of Indian IPO Market

Role of corporate governance indicators in IPO (Initial Public Offering) pric- ing is moderately researched area, however, a majority of these researches are found to be in context of other than Asian economies. Particularly, in context of Indian IPO market, only a few studies have been conducted in the past. Hence, the present study aspires to bridge this gap by examining the statistic- al significance of board-related corporate governance mechanisms in pre- dicting the likelihood of IPO underpricing. This study is unique as it incor- porates a new dimension of “board leadership” and examines the impact of having an independent director as the chairman of the board on IPO under- pricing. Binary Logistic Regression Model is used to establish the relationship between IPO Listing gain/loss and board-related corporate governance me- chanisms viz. participation of women directors on board, nature of board leadership and board independence.
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The Impact of Internationalization on Post-IPO Performance of Firms

The Impact of Internationalization on Post-IPO Performance of Firms

According to Vernon (1966, 1971), the internationalization process of firms follows the development of the product life cycle. In particular, during the 1960s Vernon observed that products in their introductory phase were initially produced in the US (the home market) and exported to other countries. When products become mature, production was started in other advanced countries, serving local markets. Finally, when products became standardized, production facilities were opened in less developed countries to meet local demand. However, Vernon (1979) himself criticized some of the starting assumptions of the product cycle hypothesis since differences among many countries (at least developed countries) had significantly reduced or disappeared and the geographical reach of many enterprises had increased. Reduction in trade barriers, globalization, and advancement in communication technologies have enabled companies to launch new products in several markets at the same time. In particular, in industries characterized by a high level of innovation (e.g., electronics), innovating firms limited to their home countries are no longer very common. However, even though Vernon’s product cycle hypothesis has lost its explanatory power in recent years, it may still provide guidance for the internationalization of some enterprises. The implication for internationalization-performance relationship is that firms will benefit from international operations if internationalization is done according to the product life cycle.
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Do Women on Boards affect Firm\u27s Financial Performance? Evidence from Indian IPO Firms

Do Women on Boards affect Firm\u27s Financial Performance? Evidence from Indian IPO Firms

The objective of this paper is to study whether the presence of women on boards affects the financial performance of firms. This study builds upon other studies that have earlier tried to determine the impact of number of women directors in Indian corporates on their financial performances, in terms of market performance index, i.e. Tobin's Q. The new Companies Act, 2013 has mandated the appointment of at least one woman director in certain classes of listed companies in India as described in Section 149(1)(b), which could possibly bring about a change in the governance and thus the financial performance of firms. The focus of this study is on finding and analysing the impact of compliance with this provision on the financial performance of IPO firms. In order to test our hypotheses, we selected 41 Indian Companies that have made an Initial Public Offer (IPO) in the recent past and have been listed on Bombay Stock Exchange during the period 2012-2016. The performance of each of these firms has been measured in terms of Tobin’s Q for 3 successive years after their listing (IPO) as well as by using two gender diversity index values- Blau Index and Shannon index. The study concluded that the proportion of women on board is insignificant and that it could not impact the financial performance of the firms. Neither has it caused any adverse impact on the performance of these firms.
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Optimal Timing for an IPO with Market Sentiment'

Optimal Timing for an IPO with Market Sentiment'

Despite the huge amount of work regarding Real Options, such as McDonald and Siegel (1986), Luerhman (1998) and Bowman and Moskowitz (2001), there are not many authors that aimed to study IPOs with Real Options. One of the first models that times IPOs was created by Zingales (1995). The author looks at the IPO as a way of transferring control in the company. Starting with a separation between cash flow and control rights, Zingales sug- gests that the owner must sell the former first, retaining the control of the company. After that, the owner must sell the rest of the company in a direct negotiation. As the author assumes, this model is suitable for subsidiaries. In a different approach, Draho (2000) considers the dynamics of going public using relative valuation techniques. This way, the author values the waiting option and considers its exercise as a cost of the IPO. In this model, private companies are valued in accordance to market indexes. The author conclu- sions help to explain the hot markets subject, being these a consequence of the optimal exercise of waiting options. Using a binomial model, Benninga et al. (2005) model the decision to go public considering that at the beginning of each period, the owner of the company can take the company public or keep it private (or turn it into a privately held company or not, in the case of being public in the previous period). If the company is private, the owner will receive the value of its cash flows and the private benefits of control. If it is public, its shareholders will receive the cash flows, besides the gains of diversification. When the cash flows are sufficiently high, the gains from diversification outweigh the private benefits of control and the company goes public. Casassus and Villalon (2010) propose a framework where the IPO company (or group of companies) may have an impact in the market condi-
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IPO valuation and performance : evidence from the UK main market

IPO valuation and performance : evidence from the UK main market

The results in a final selection of 5 risk factors (industry risk, efficiency risk, capacity risk, capital availability risk, and default credit risk) that are incl[r]

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Market for Luca Pacioli\u27s Summa Arithmetica

Market for Luca Pacioli\u27s Summa Arithmetica

Abstract: This paper looks at an aspect of Luca Pacioli and his Summa Arithmetica that has not previously been explored in detail – the mar- ket for which he wrote the book. In order to do so, it follows a path identified by two clues in the bookkeeping treatise as to the nature of this market that modern eyes, unaware of how life was in late 15th century Italy, have missed. After discussing the curriculum taught in schools at that time, this paper considers a range of possible markets for which the book may have been written. The paper concludes that it was written primarily for, and sold mainly to, merchants who used the book as a reference text, as a source of pleasure from the math- ematical puzzles it contained, and as an aid for the education of their sons.
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Health Care\u27s Market Bureaucracy

Health Care\u27s Market Bureaucracy

This Article draws from a mountain of empirical evidence to document the irrefutable failure of health care’s most popular market-based policies to live up to both of these promises. To the contrary, despite decades of efforts and refinement, these policies produce exactly the opposite: a myth of choice and a market bureaucracy. Rather than helping people get what they want, market- based policies produce a maze of obligations and decisions that confuse people and burden them when they are sick. To illustrate, take just one example from the many described in more detail below. When selecting an insurance plan, people struggle to choose, dread the shopping experience, and often do not choose well. One study simulated plan choice in an ACA marketplace among a relatively informed group of participants, and they chose an objectively better plan only half of the time. 18
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Unlike the much-hyped Y2K, which turned out to

Unlike the much-hyped Y2K, which turned out to

Apart from the direct in- volvement of certain faculty in the ABET process by vir- tue of their membership in the ABET Evaluation Com- mittee and/or the Curriculum Committee, all faculty[r]

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