scholarly journals Pricing And Long-Run Performance Of The Venture-Backed And Nonventure-Backed IPOS

2011 ◽  
Vol 2 (6) ◽  
Author(s):  
Arvin Ghosh
Keyword(s):  
Stock Market ◽  
Venture Capital ◽  
Initial Public Offerings ◽  
Cash Flows ◽  
Venture Capitalists ◽  
Regression Equations ◽  
Public Offerings ◽  
Long Run ◽  
First Time ◽  
Prevalent Form

Initial Public Offerings (IPOs) were the most prevalent form to raise capital by firms wanting to go public during the last decade (1990 2000) in the United State. There were thousands of firms that went public for the first time, mostly in the technology-heavy NASDAQ stock market. Along with the regular IPOs came the IPOs backed by venture capitalists, who specialize in financing promising startup companies and bringing them public. As one-third of the IPOs were backed by venture capitalists during 1990 2000, our purpose here is to examine the pricing and long-run performance of the venture-backed and nonventure-backed IPOs that were issued in the NYSE and NASDAQ stock market during the period covered by our study. We have found, among others, that the venture-backed IPOs performed much better as compared to the nonventure-backed IPOs. The returns of the former were consistently higher than the latter during 1900 2000. Also, the price returns as well as the operating ratios and the growth of cash flows, were higher both in the NYSE and NASDAQ market. The regression equations also confirmed closer association with the independent variables belonging to the IPOs backed by venture capital than the non-venture capital.

Venture Capital, Angel Capital, and Other Finance, IPOs, and Acquisitions

2021 ◽  
pp. 353-369
Author(s):  
Lin Lin
Keyword(s):  
Stock Market ◽  
Mergers And Acquisitions ◽  
Venture Capital ◽  
Initial Public Offerings ◽  
Capital Market ◽  
Private Equity ◽  
Small Enterprises ◽  
Access To Finance ◽  
Entrepreneurial Ventures ◽  
Public Offerings

This chapter focuses on the development of non-bank financial institutions, particularly venture capital (VC), angel capital, private equity, and foreign funds, and their role in funding entrepreneurial ventures in China. It discusses the development of the venture capital market and the evolution of domestic and foreign funds in China. It examines the exits of VC-backed companies through initial public offerings (IPOs) and mergers and acquisitions and explores the connection between the stock market and VC market in China. It also evaluates recent institutional improvements and regulatory reforms for facilitating access to finance for small enterprises in China, especially the recent reforms to the stock market.

Determinants of Initial and Long-Run Performance of IPOs in Indian Stock Market

2008 ◽  
Vol 4 (4) ◽  
pp. 24-37 ◽  
Author(s):  
Shikha Sehgal ◽  
Balwinder Singh
Keyword(s):  
Stock Market ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Public Offerings ◽  
International Evidence ◽  
Long Run ◽  
Overreaction Hypothesis ◽  
The Mean ◽  
Indian Stock Market ◽  
Very High

The paper investigates the possible determinants of underpricing and the long-run performance of 438 Indian initial public offerings (IPOs) listed on the Bombay Stock Exchange during June 1992 – March 2001. The mean underpricing has been found to be 99.20 per cent, which is very high if compared with the international evidence. Age of the firm, listing delay at IPO and number of times the issue is subscribed have been found to be the important determinants of underpricing. Indian IPOs do not tend to underperform in the long-run and underpricing has been primarily found to explain the long-run performance. The study, thus provides evidence of overreaction hypothesis.

Macroeconomic Factors and Initial Public Offerings in Brazil

2021 ◽  
pp. 097215092110036
Author(s):  
Daniel Penido de Lima Amorim ◽  
Marcos Antônio de Camargos ◽  
Cristiano Mendonça Barbosa Lima Ferreira
Keyword(s):  
Stock Market ◽  
Interest Rates ◽  
Initial Public Offerings ◽  
Economic Activity ◽  
Macroeconomic Factors ◽  
Stock Market Returns ◽  
Macroeconomic Conditions ◽  
Public Offerings ◽  
Long Run ◽  
The Impact

The strategy of going public plays a relevant role in business growth. Macroeconomic conditions are decisive for initial public offerings (IPOs). In this study, we analyzed the impact of macroeconomic factors on IPOs in the Brazilian stock market, considering the period from 2007 to 2018. We used autoregressive distributed lag (ARDL) models to analyze the existence of cointegration between the variables and the long-run effects. The estimated models considered the effects on the proceeds or the number of IPO, which can be related to interest rates, stock market returns, economic activity, and economic uncertainty. Our results indicate that economic activity and uncertainty have long-run effects on both the proceeds and the number of IPOs. There is also evidence that the interest rate has a long-run relationship with the IPO proceeds. In addition, we tested the causal relationships between macroeconomic factors and the IPO variables. For this purpose, we adopted a Granger causality test. We highlight that uncertainty precedes the IPO proceeds. Expectations about macroeconomic conditions are relevant for the decision to go public. Our evidence can provide guidance for stakeholders and policymakers.

scholarly journals Venture capital and risk management: evidence from initial public offerings

2012 ◽  
Vol 2 (1) ◽  
pp. 30-40 ◽  
Author(s):  
Charles E. Bamford ◽  
Edward B. Douthett
Keyword(s):  
Risk Factors ◽  
Risk Management ◽  
Venture Capital ◽  
Initial Public Offerings ◽  
Venture Capitalists ◽  
Profit Margins ◽  
Public Offerings ◽  
Operating Profit ◽  
Specific Risk ◽  
Ex Ante

In this study we analyze a sample of initial public offerings (IPOs) to infer the sources of firm-specific risk associated with investment by venture capitalists. The results indicate that IPO backing by venture capitalists is associated with risk factors related to operating profit margins and ongoing sales generation, but not operational financing. The results also indicate that venture-backed IPOs are associated with greater reductions in firm-specific risk over the course of a year that includes the date of the IPO. In sum, the findings suggest venture capitalists are willing to accept higher levels of uncertainty in those instances where they have an advantage in terms of managerial skill, and are able to reduce firm-specific risk subsequent to investment in order to maximize returns when they cash out. Our study also makes use of proxies that are representative of the ex-ante nature of firm-specific risk at the time of a new issue.

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