Die Fehlbewertung junger Aktiengesellschaften beim Gang an die Börse – Ursachen und wirtschaftspolitische Konsequenzen

2003 ◽  
Vol 52 (1) ◽  
Author(s):  
Christine Ploog ◽  
Michael Stolpe
Keyword(s):  
Market Power ◽  
Initial Public Offerings ◽  
Investment Banks ◽  
Policy Options ◽  
Public Offerings ◽  
Speculative Bubbles ◽  
Privatisation Programme ◽  
Welfare Implications

AbstractThis paper discusses policy options to reduce underpricing in initial public offerings (IPOs). It surveys recent theoretical insights into the causes and welfare implications of underpricing and reviews evidence on the signalling hypothesis, the winner’s curse model, the role of underwriters in assessing issuing firms’ future profitability and the genesis of speculative bubbles in IPO markets. The paper concludes that governments should curtail the abuse of market power in underwriting by prohibiting the allocation of shares to insiders and by reducing the incentives for investment banks to exploit underpriced share issues in order to cross-subsidise unrelated lines of business. Moreover, governments should seek to stabilize the IPO market by committing themselves to regular equal-sized issues of shares in government assets as part of a long-term privatisation programme.

scholarly journals Introduction

2018 ◽  
pp. xiv-24
Author(s):  
Douglas Cumming ◽  
Sofia Johan
Keyword(s):  
Initial Public Offerings ◽  
Service Providers ◽  
Investment Banks ◽  
Public Offerings ◽  
Reverse Mergers ◽  
Short And Long Term ◽  
Long Term Performance ◽  
Term Performance ◽  
Special Purpose Acquisition Companies

The worldwide landscape for raising firm capital from Initial Public Offerings (IPOs) has significantly evolved over the last few decades. This introductory chapter reviews more recent research on initial public offerings. The Oxford Handbook of IPOs comprises twenty-nine chapters from authors around the world. The chapters describe the economics of going public, short- and long-term performance of IPOs, regulation of IPOs, IPOs versus acquisitions, reverse mergers, special purpose acquisition companies, service providers including investment banks and auditors, venture capital funds, international differences in IPOs, and crowdfunding. The Introduction summarizes the chapters that appear in the Handbook and highlight research trends on topic.

scholarly journals The Role of Governance and Bank Funding in the Determination of Cornerstone Allocations in Chinese Equity Offers

2019 ◽  
Vol 12 (3) ◽  
pp. 114 ◽  
Author(s):  
Paul B. McGuinness
Keyword(s):  
Initial Public Offerings ◽  
Political Connections ◽  
Material Incentive ◽  
Family Resources ◽  
Public Offerings ◽  
Women On Boards ◽  
Bank Funding

This article investigates the causal factors underlying cornerstone investor (CI) participation in initial public offerings in China’s offshore Hong Kong market. Prospectus-based declarations on such allocations suggest that CI undertakings offer strong certification effects. Entrepreneurs planning for IPO thus have a material incentive to court CIs. The present analysis reveals that a firm’s pre-IPO financials and governance attributes strongly correlate with success in this field. Specifically, CI participation is greater in issuers with established long-term loan positions. Firms housing younger CEOs and a greater number of family-connected board officers also generate more CI interest. In contrast, the fraction of independent directors and women on boards exert minimal effect. However, further analysis reveals that greater independent director presence strongly supports CI participation in family-centric entities, but imparts little to no effect on such investment in either state-run or non-family-controlled private issuers. Additionally, an issuer’s political connections galvanize CI participation. Moreover, the present study highlights the importance of family resources (in non-state sponsored entities) and political connections (in state-held firms) in drawing-in CI involvement. Given the spread of CI arrangements to other primary market settings, the present enterprise also offers guidance on anchor investment elsewhere.

Performance of VC/PE-backed IPOs: New Insights from India

2020 ◽  
pp. 097215092095054
Author(s):  
Soumya G. Deb ◽  
Pradip Banerjee
Keyword(s):  
Initial Public Offerings ◽  
Private Equity ◽  
Operating Performance ◽  
Equity Market ◽  
Venture Capitalists ◽  
Public Offerings ◽  
Market Perception ◽  
Using Data

This article explores long-term equity and operating performance of Indian firms issuing initial public offerings (IPOs) backed by venture capital/private equity (VC/PE) funding. Using data for 173 IPOs backed by VC/PE funding during 2000–2016, the article shows that equity market performance of VC/PE-backed IPOs is unimpressive post issue, compared to their peers. This is not only due to market perception but also associated with a declining operating performance. However, information asymmetry, mispricing and ‘timing the market’ by issuing firms do not seem to be the reasons for such long-term underperformance. We argue that it may be a case of too much money chasing too few winners for Indian IPOs and individual rent-seeking activities by managers. The observation raises the question of effectiveness of the monitoring role of venture capitalists or PE funders post the IPO in an Indian context. This is substantiated by our additional finding that sustained monitoring and hand-holding by venture capitalists and PE funders post the IPO cause an improvement in performance. The findings of this study can have significant implications for all stakeholders, particularly common investors in the Indian equity market.

The role of mandatory lockup ratios in initial public offerings

2021 ◽  
Author(s):  
Rasidah Mohd‐Rashid ◽  
Ruzita Abdul‐Rahim ◽  
Karren Lee‐Hwei Khaw ◽  
Waqas Mehmood
Keyword(s):  
Initial Public Offerings ◽  
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.

scholarly journals Role Of Underwriters In Restraining Earnings Management In Initial Public Offerings

2012 ◽  
Vol 28 (4) ◽  
pp. 709 ◽  
Author(s):  
Hei Wai Lee ◽  
Yan Alice Xie ◽  
Jian Zhou
Keyword(s):  
Earnings Management ◽  
Initial Public Offerings ◽  
The Internet ◽  
Venture Capitalists ◽  
Font Size ◽  
Going Public ◽  
Public Offerings ◽  
Investment Bankers ◽  
Sarbanes Oxley

<span style="font-family: Times New Roman; font-size: small;"> </span><p style="margin: 0in 0.5in 0pt; text-align: justify; mso-pagination: none;" class="MsoNormal"><span style="font-family: Times New Roman;"><span style="font-size: 10pt;">We investigate the </span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;">relationship</span><span style="font-size: 10pt;"> between underwriter</span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;"> reputation</span><span style="font-size: 10pt;"> and earnings management of IPO firms over the period of 1991-2005. We find that </span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;">IPO firms engage in less earnings management</span><span style="font-size: 10pt;"> if </span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;">they</span><span style="font-size: 10pt;"> are underwritten by prestigious investment bankers. Furthermore, the role of prestigious underwriters in restraining earnings management of IPO issuers do not change during the Internet Bubble period or after the passage of the Sarbanes-Oxley Act (SOX). The findings support the certification role of underwriters in the IPO process.<span style="mso-spacerun: yes;"> </span>We also document that</span><span style="font-size: 10pt; mso-fareast-language: ZH-CN;"> firms going public in the post-SOX period engage in less earnings management compared to firms going public in the pre-SOX period</span><span style="font-size: 10pt;">. Further findings suggest that the changing objectives of venture capitalists may explain the reduction in the level of earnings management of IPO firms following the passage of SOX.</span></span></p><span style="font-family: Times New Roman; font-size: small;"> </span>

The Role of Private Equity in Initial Public Offerings

2015 ◽  
pp. 200-214
Author(s):  
Shantanu Dutta ◽  
Arup Ganguly ◽  
Lin Ge
Keyword(s):  
Initial Public Offerings ◽  
Private Equity ◽  
Public Offerings
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