Earnings quality of Indonesian firms surrounding initial public offerings

2018 ◽  
Vol 14 (1) ◽  
pp. 47
Author(s):  
Yanthi Hutagaol Martowidjojo ◽  
Felita Widyanto
Keyword(s):  
Initial Public Offerings ◽  
Earnings Quality ◽  
Public Offerings

scholarly journals Sins for some, virtues for others: Media coverage of investment banks’ misconduct and adherence to professional norms during the financial crisis

2018 ◽  
Vol 72 (9) ◽  
pp. 1436-1463 ◽  
Author(s):  
Thomas J Roulet
Keyword(s):  
Financial Crisis ◽  
Initial Public Offerings ◽  
Media Coverage ◽  
Investment Banks ◽  
Professional Misconduct ◽  
Public Offerings ◽  
Professional Norms ◽  
The Face ◽  
Corporate Customers

Why does professional misconduct persist in the face of media scrutiny? In this study, we explain how professional norms can be at odds with societal norms and how the behaviours they trigger can be perceived as misconduct. Most audiences tend to disapprove of wrongdoings, but specific stakeholders may interpret this disapproval as an indication of the focal organization’s level of adherence to professional norms. Building on mixed methods, we explore the case of the investment banking industry during the financial crisis and suggest that corporate customers were favourably biased by the reporting of banks’ misconduct in the print media as they linked it to the banks’ quality of service. We capture the extent to which banks are associated with misconduct, signalling their adherence to negatively perceived professional norms. We then look at how such signalling affects the likelihood for banks to be invited into initial public offerings syndicates. Our findings show that the more banks are disapproved of for their wrongdoings, the more likely they are to be selected to join a syndicate. This study suggests that the coverage of misconduct can actually act as a positive signal providing banks with incentives to engage in what is broadly perceived as professional misconduct.

Earnings quality at initial public offerings

2008 ◽  
Vol 45 (2-3) ◽  
pp. 324-349 ◽  
Author(s):  
Ray Ball ◽  
Lakshmanan Shivakumar
Keyword(s):  
Initial Public Offerings ◽  
Earnings Quality ◽  
Public Offerings

Divergence of Opinion, Uncertainty, and the Quality of Initial Public Offerings

2001 ◽  
Vol 30 (4) ◽  
pp. 5 ◽  
Author(s):  
Todd Houge ◽  
Tim Loughran ◽  
Gerry Suchanek ◽  
Xuemin Yan
Keyword(s):  
Initial Public Offerings ◽  
Public Offerings ◽  
Divergence Of Opinion

The impact of the quality of VC financing and monitoring on the survival of IPO firms

2017 ◽  
Vol 43 (4) ◽  
pp. 440-451 ◽  
Author(s):  
Sophie Pommet
Keyword(s):  
Initial Public Offerings ◽  
Survival Rates ◽  
Venture Capitalist ◽  
Venture Capitalists ◽  
Content Type ◽  
Public Offerings ◽  
Advantages And Disadvantages ◽  
Short Run ◽  
The Impact

Purpose The purpose of this paper is to analyze the impact of venture capital (VC) involvement on the survival rate of French initial public offerings (IPOs) during the period 1996-2006. The paper examines the link between the survival rates of IPO companies, and several proxies for the quality of venture capitalist financing and monitoring. Design/methodology/approach To analyze the impact of the involvement of VC on both long and short run post-IPO survival, two methods are used: survival analysis (the Cox proportional hazard), and a logit model. Findings This paper shows that the quality of venture capitalist monitoring, measured by the duration of their investment before the IPO, is positively correlated with company survival rates. However, the author does not find the expected result when the author considers the experience of venture capitalists measured by their age. Research limitations/implications The findings are limited to a sample of VC-backed companies that went public. Practical implications The findings have implications for entrepreneurs. When analyzing the advantages and disadvantages linked to the presence of VC firms in the capital of their companies, entrepreneurs should consider that certain types of venture capitalists might be more or less able to be involved in the monitoring and value adding process. Originality/value To date, there is no comprehensive study on the French IPO market analyzing both long and short run post-IPO survival of VC-backed companies. This paper fills this gap.

scholarly journals Equilibrium Signal and Purchase Decision in China’s IPO Net Roadshow: A Dynamic Game Approach

2016 ◽  
Vol 2016 ◽  
pp. 1-13 ◽  
Author(s):  
Yi Zhao ◽  
Dong Li
Keyword(s):  
Initial Public Offerings ◽  
Opportunity Cost ◽  
Intrinsic Value ◽  
Empirical Studies ◽  
Dynamic Game ◽  
Public Offerings ◽  
Bayesian Nash Equilibrium ◽  
Pooling Equilibrium ◽  
Separating Equilibrium

The net roadshow has been dominant in China’s IPO (initial public offerings) roadshow structure. Considering the dynamic game with incomplete information between the issuer and investor during China’s IPO net roadshow, the quality of the letter of intent is presented as a discrete signal in this paper in accordance with China’s IPO net roadshow characteristics. A signaling game model is established to conclude the issuer’s equilibrium signal and the investor’s purchase action. The issuer disguised a letter of intent to uplift its quality if the disguising cost per share stands below the bidding spread. If the investor judges the letter of intent as high-quality, the basis of purchase is that the opportunity cost per share is less than the expectation on the intrinsic value of the IPO stock. Otherwise the investor rejects purchasing on the condition that the opportunity cost outnumbers the valuation of intrinsic value. In conclusion, there exist unique separating equilibrium and pooling equilibrium as a perfect Bayesian Nash equilibrium, and the existence and uniqueness of their equilibrium domains have been verified by numerical simulation. Finally, the comprehensive empirical studies have validated only one separating and pooling equilibrium existing in China’s real-world IPO market.

Initial Public Offerings of State-Owned Enterprises: An International Study of Policy Risk

2007 ◽  
Vol 42 (2) ◽  
pp. 313-337 ◽  
Author(s):  
Swee-Sum Lam ◽  
Ruth Seow-Kuan Tan ◽  
Glenn Tsao-Min Wee
Keyword(s):  
Information Asymmetry ◽  
Initial Public Offerings ◽  
International Study ◽  
Cross Sectional ◽  
Public Offerings ◽  
The Cross ◽  
Policy Risk ◽  
Practical Measure ◽  
Risk Policy

AbstractPolicy risk, rather than information asymmetry, explains the cross-sectional underpricing of privatized initial public offerings. The issuer governments of high policy risk issues tend to retain a large equity stake and underprice more with underpricing increasing in retained equity. While the issuer government's retained equity is an observable signal for policy risk, we find that the quality of a country's bureaucratic machinery is a more intuitive and practical measure of policy risk. Policy risk also explains the absence of a systematic relation between the initial returns on privatized and private initial public offerings.

The Valuation of Biotech IPOs

2005 ◽  
Vol 20 (4) ◽  
pp. 423-459 ◽  
Author(s):  
Re-Jin Guo ◽  
Baruch Lev ◽  
Nan Zhou
Keyword(s):  
Initial Public Offerings ◽  
Cash Flows ◽  
Value Drivers ◽  
Specific Product ◽  
Public Offerings ◽  
Long Term Performance ◽  
Term Performance ◽  
Relative Valuation

The valuation of initial public offerings (IPOs) is of considerable interest, given the important role these enterprises play in economic growth and investors' decisions. IPO valuation is particularly challenging due to the meager information available about new enterprises at offering dates. We extend the research on IPO valuation in various directions. First, we penetrate deep beyond the traditional proxies for value drivers, such as R&D expenditures and cash flows, by defining and testing a host of specific product-related and competitive environment value drivers; second, we examine IPO valuations at three distinct phases of the going-public process; third, we employ both the direct valuation and relative valuation approaches; and fourth, we round up the analysis by examining the long-term performance of IPOs. Based on a sample of biotech IPOs from the 1990s, we document the overwhelming importance of product-related and intellectual property fundamentals, as well as the irrelevance of several key signals, such as venture capital backing and the quality of underwriters, which played prominent roles in previous research.

scholarly journals Abertura ou não de capital no Brasil: uma análise prática da percepção dos executivos financeiros

2014 ◽  
Vol 12 (4) ◽  
pp. 597
Author(s):  
Helen Cristina Steffen ◽  
Francisco Antônio Mesquita Zanini
Keyword(s):  
Initial Public Offerings ◽  
Chief Financial Officers ◽  
Positive Sign ◽  
Going Public ◽  
Accounting Firm ◽  
Public Offerings ◽  
Big 4 ◽  
Process Issue ◽  
The Cost

This study investigated the aspects and reasons why Brazilian firms go public, from the viewpoint of chief financial officers (CFOs). From the BM&F Bovespa and the magazine Valor Investe, we selected 113 Brazilian firms that had successfully completed an Initial Public Offerings (IPO) between January 2004 and December 2010, and firms those that are large enough to go public, but have not attempted an IPO. Following Brau and Fawcett (2006), we surveyed the CFOs about their perceptions at the time of the IPO. The most findings were: (1) the main motivation for going public was to reduce the cost of capital; (2) general market conditions were crucial to the timing of the IPO; (3) underwriters were selected based on overall reputation, quality of the research department, and industry expertise; (4) the use of a Big-4 accounting firm was seen as a positive sign by the respondents; (5) the overallotment option of shares to stabilize prices was considered the most important IPO process issue; and (6) the main reason for remaining private was to preserve decision-making control and ownership.

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