Board characteristics and earnings forecasts accuracy in IPO prospectuses

AbstractUsing a sample of 104 companies that conducted initial public offering (IPO) on the Warsaw Stock Exchange between 2006 and 2016, we investigated the relationship between the accuracy and bias of the earnings forecast disclosed in the IPO prospectus and the firm corporate governance attributes. Applying multiple Ordinary Least Squares (OLS) regressions models, we focused on the role of the board size, the percentage of women on the board, the board age diversity measure, and the proportion of shares owned by the members of the board. Generally, our findings show that some characteristics of management and supervisory board improve the usefulness of earnings forecasts’ credibility. Especially, a more diversified board in terms of age and higher management ownership results in more accurate forecasts. This is the first study giving an insight into the role of supervisory and management board characteristics on precision of earnings forecasts revealed in the prospectus by Polish IPO companies.

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Contested takeovers of family firms and socioemotional wealth: a case study

Baltic Journal of Management ◽

10.1108/bjm-12-2016-0277 ◽

2017 ◽

Vol 12 (4) ◽

pp. 447-463 ◽

Cited By ~ 1

Author(s):

Kevin Campbell ◽

Magdalena Jerzemowska

Keyword(s):

Family Firms ◽

Stock Exchange ◽

Supervisory Board ◽

Socioemotional Wealth ◽

Content Type ◽

Warsaw Stock Exchange ◽

Gains And Losses ◽

Takeover Bids

Purpose The purpose of this paper is to provide an understanding of the importance of socioemotional wealth (SEW) to family firms in Poland viewed through the lens of the events surrounding the first hostile takeover bid of the post-communist era on the Warsaw Stock Exchange when the clothing company Vistula & Wólczanka (V&W) made an unsolicited, leveraged bid for the family-controlled jewelry company W. Kruk. Design/methodology/approach The 2008 takeover and its aftermath are described in the context of the corporate governance and legal environment in Poland. The case study events demonstrate the connection between firm behavior and SEW theory. Findings After the acquisition of W. Kruk by V&W, the Kruk family purchased stock in the newly named Vistula Group and gained influence over the supervisory board in concert with a business ally, eventually wresting back control of the company in the style of a Pac-Man “defense.” The case study illustrates the importance of SEW in family firm takeovers. Research limitations/implications The case study design has limitations for generalizability. Nevertheless the research highlights the important role of SEW preservation in understanding the market for corporate control of listed family firms in Poland. Practical implications Understanding the reaction by family firms to takeover bids requires recognition that there is a tradeoff between financial and SEW considerations, not just financial gains and losses. Originality/value The case study demonstrates the importance of SEW to family firms and suggests that the balance of power in takeovers on the Polish stock market rests with incumbent management.

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Initial Public Offering (IPO) as a Potential Source of Capital for the Development of the Wood-based Industry Enterprises in Poland

Quality Production Improvement - QPI ◽

10.2478/cqpi-2019-0016 ◽

2019 ◽

Vol 1 (1) ◽

pp. 117-123

Author(s):

Leszek Wanat ◽

Łukasz Sarniak ◽

Elżbieta Mikołajczak

Keyword(s):

Initial Public Offering ◽

Capital Market ◽

Stock Exchange ◽

Descriptive Analysis ◽

Green Economy ◽

Development Level ◽

Warsaw Stock Exchange ◽

Order Preference ◽

Public Offering ◽

The Capital Market

Abstract The quest for new sources of financing for the development of green economy sectors and enterprises is one of the challenges to effective management. This study verifies whether a relationship exists between the activity of selected companies who access the capital market in search for new financing sources, their development level and their competitive edge. The sample used in this study was composed of companies from the forestry and wood-based sector (a major part of the Polish economy) listed on the Warsaw Stock Exchange. The Technique for Order Preference by Similarity to an Ideal Solution (TOPSIS) was used to assess the development level of selected enterprises. The main recommendations were formulated based on the findings from the analysis of performance ratios and from the comparative and descriptive analysis of data on stock exchange transactions in the wood-based sector. This is because the assumption was made that by becoming more active in the capital market and, as a consequence, by strengthening their competitive position, the enterprises covered by this study may contribute to adding value in the circular economy.

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Determinants of performance of privatized firms: The role of the economy, competition, restructurings financial markets, corporate ownership and governance

Risk Governance and Control Financial Markets & Institutions ◽

10.22495/rgcv1i4art4 ◽

2011 ◽

Vol 1 (4) ◽

pp. 39-64 ◽

Cited By ~ 1

Author(s):

José Manuel Bernardo Vaz Ferreira

Keyword(s):

Financial Markets ◽

Initial Public Offering ◽

Stock Exchange ◽

Economic Conditions ◽

Corporate Ownership ◽

Performance Improvements ◽

Privatized Firms ◽

Public Offering ◽

Performance Behavior

The aim of this work is to investigate the determinants and why and how the post-privatization firm’s performance improvements occur in an application to the Portuguese case. We test the effects of some causes that may have effects on that performance behavior, based on the agency, property rights and public choice theories. We conclude that the privatization itself, the simple act of privatizing a firm, leads to performance improvements, independently of the effect of other determinants. We observe the same effect when there are favourable economic conditions, when they are in a competitive market, when companies are listed in a stock exchange after privatization, when they are privatized by an initial public offering and when companies develop restructurings before privatization.

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Motives and effects of the initial public offerings on the Warsaw Stock Exchange

Equilibrium ◽

10.12775/equil.2015.020 ◽

2015 ◽

Vol 10 (2) ◽

pp. 207

Author(s):

Tomasz Sosnowski

Keyword(s):

Initial Public Offerings ◽

Initial Public Offering ◽

Stock Exchange ◽

Market Value ◽

Public Offerings ◽

Warsaw Stock Exchange ◽

Business Efficiency ◽

Secondary Shares ◽

Public Offering

This paper empirically investigates the links between the motives for going public and changes in the market value and efficiency of new stock companies. Using a sample of 200 firms from Warsaw Stock Exchange between 2005 and 2012 I find that the principal purpose of initial public offering is raising additional capital by the company but divestment grounds of initial shareholders are also important. I find evidence that the sale of secondary shares in the initial public offering may be seen as a negative signal at aftermarket performance of the firm. The data reveal that the most adverse long-term changes in the market value and business efficiency are observed for those companies, where in the initial public offering both primary and secondary shares were sold.

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The Delisting of a Company from the Warsaw Stock Exchange as a Result of the Cancellation of the Dematerialisation of Shares – Tender Offer Price vs. IPO Price

Annales Universitatis Mariae Curie-Skłodowska sectio H Oeconomia ◽

10.17951/h.2020.54.1.31-40 ◽

2020 ◽

Vol 54 (1) ◽

pp. 31

Author(s):

Sylwia Frydrych

Keyword(s):

Initial Public Offering ◽

Stock Exchange ◽

Theoretical Background ◽

Share Price ◽

Tender Offers ◽

Share Prices ◽

Warsaw Stock Exchange ◽

Positive Rate ◽

Public Offering ◽

A Company

Theoretical background: The growth in the number of companies delisted from the Warsaw Stock Exchange (WSE), as a result of the cancellation of the dematerialisation of shares, has become a reason for considerations regarding the share price in tender offers addressed to shareholders who have held company securities since the Initial Public Offering (IPO).Purpose of the article: The goal of this study was to evaluate whether the price in tender offers of the shares of companies which had finally been excluded from trading on the WSE as a result of the cancellation of the dematerialisation of shares would ensure a positive rate of return for shareholders who have held the shares since this company’s debut on the regulated market of the WSE.Research methods: Public tender offers, announced between 2012 and 2018 on the regulated market of the WSE have been analysed. The analysis covered prices of shares of new listings on the WSE and share prices in the tender offers of 213 companies, out of which 55 companies have been excluded from trading on the regulated market of the WSE as a result of the cancellation of the dematerialisation of shares.Main findings: The results of the research indicate that more than a half of the shareholders who have held the securities of companies in their portfolio since their debut, have suffered losses after companies have been excluded from trading on the WSE as a result of the cancellation of the dematerialisation of shares. Only 11% of the examined companies have generated more than double profit for investors compared with the issue price during their IPO. This research is one of the few studies on the Polish stock market to the best of the author’s knowledge.

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The impact of the january effect on the IPO underpricing in Poland

Folia Oeconomica Stetinensia ◽

10.2478/foli-2013-0010 ◽

2013 ◽

Vol 13 (1) ◽

pp. 121-135

Author(s):

Adrian Wołoszyn ◽

Dariusz Zarzecki

Keyword(s):

Initial Public Offering ◽

Stock Exchange ◽

January Effect ◽

Ipo Underpricing ◽

Asymmetry Of Information ◽

Warsaw Stock Exchange ◽

Using Data ◽

Public Offering ◽

And Control ◽

The Impact

Abstract We examine the initial public offering (IPO) underpricing phenomenon in Poland using data from the Warsaw Stock Exchange (the main market). In the article we survey historical average IPO underpricing in Europe and outside Europe. We discuss the determinants of the IPO underpricing which is based on asymmetry of information, ownership and control, institutional explanations and behavioural explanations. We discuss the calendar effect and we examine the influence of the January effect on the IPO underpricing. On the Warsaw Stock Exchange in 2005-2011, the IPO underpricing was bigger for companies that debuted in January than for companies that debuted in other months. The empirical results are not statistically significant.

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Audit Committee Formation: The Case of Poland

Central European Management Journal ◽

10.7206/cemj.2658-0845.50 ◽

2021 ◽

Vol 29 (2) ◽

pp. 169-212

Author(s):

Karolina Puławska ◽

◽

Dorota Dobija ◽

Katarzyna Piotrowska ◽

Grygorii Kravchenko ◽

...

Keyword(s):

Logistic Regression ◽

Audit Committee ◽

Stock Exchange ◽

Supervisory Board ◽

Primary Analysis ◽

Important Relationship ◽

Warsaw Stock Exchange ◽

And Control ◽

Nonfinancial Firms

Purpose: This study investigates the determinants of audit committee (AC) formation in a semi-mandatory setting of a European economy, in which ownership and control are predominantly in the hands of families and business groups, and the voluntary practice of forming an AC has not been widely accepted. Methodology: This research uses a sample of Polish nonfinancial firms listed on the Warsaw Stock Exchange (WSE) in 2008–2015. The study implemented logistic regression to test the role of the supervisory board (SB) and companies’ compositional characteristics in AC creation. Findings: Primary analysis provided evidence of an inverted association between commonly accepted determinants of AC formation – such as the number of independent members on the supervisory board (SB) – and accounting and finance expertise of the SB members. The study also revealed that companies with foreign ownership are more likely to have an AC. Originality: This study indicates an important relationship between the existence of other SB committees as a meaningful determinant of AC formation. This article is valuable for supervisory bodies and regulators as they provide insights into factors that influence audit committee formation.

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Factors Influencing IPO Underpricing in Poland

Acta Universitatis Lodziensis Folia oeconomica ◽

10.18778/0208-6018.349.01 ◽

2020 ◽

Vol 4 (349) ◽

pp. 7-21

Author(s):

Przemysław Pomykalski ◽

Piotr Filipiak

Keyword(s):

Interest Rates ◽

Initial Public Offering ◽

Stock Exchange ◽

Recent Decade ◽

Ipo Underpricing ◽

Warsaw Stock Exchange ◽

Low Interest Rates ◽

Risk Free Rate ◽

Public Offering ◽

Free Rate

We review the theory and evidence on IPO activity and underpricing focusing on the Warsaw Stock Exchange. Although the topic has been under investigation in the past, we believe that the recent decade of low interest rates deserves inquiry. We research the extent of underpricing during this period and further conclude that three factors had a statistically significant influence on initial public offering underpricing during this period: the year of IPO, risk-free rate and WIG close value.

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What Determines the Success of an IPO? Analysis of IPO Underpricing on the Warsaw Stock Exchange

Central European Economic Journal ◽

10.2478/ceej-2021-0001 ◽

2021 ◽

Vol 8 (55) ◽

pp. 1-14

Author(s):

Paweł Małachowski ◽

Dominika Gadowska-dos Santos

Keyword(s):

Venture Capital ◽

Initial Public Offering ◽

Private Equity ◽

Main Part ◽

Stock Exchange ◽

Rate Of Return ◽

Ipo Underpricing ◽

Warsaw Stock Exchange ◽

Public Offering

AbstractThis article aimed to analyse the factors that influence the level of underpricing of an initial public offering (IPO) on the Warsaw Stock Exchange (WSE), based on the example of 101 companies debuting on the main market between 2010 and 2019. We discuss the theories that explain IPO underpricing and the research conducted so far on the Polish market. In the main part of the article, we present the results of our study aimed at identifying and characterising the hitherto-unrecognised factors determining IPO underpricing, which is a contribution to the current research on WSE trends. Our findings point to three variables that influence the level of underpricing: the involvement of private equity or venture capital funds in the transaction, the rate of return of the WSE Index in the 6 months before the IPO, and the amount of capital offered during the debut.

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Earnings management and the floatation structure: empirical evidence from Polish IPOs

Equilibrium ◽

10.24136/eq.v12i4.36 ◽

2017 ◽

Vol 12 (4) ◽

pp. 693-709 ◽

Cited By ~ 2

Author(s):

Tomasz Sosnowski

Keyword(s):

Earnings Management ◽

Initial Public Offering ◽

Stock Exchange ◽

Value Added ◽

Discretionary Accruals ◽

Significant Information ◽

Warsaw Stock Exchange ◽

Secondary Shares ◽

Public Offering ◽

Earnings Disclosures

Research background: Firms use discretionary accounting choices to manage earnings disclosures around the time of certain types of corporate events. The initial public offering particularly provides an opportunity to earnings management because of the significant information asymmetry between investors and issuers at the time of the offering. Purpose of the article: The main aim of the study is to empirically investigate the links between the earnings management and the portions of primary and secondary shares sold in IPO. Methods: In order to investigate whether the earnings management influences the issue of new shares and the sale of secondary shares I use Tobit and logit regressions, where discre-tionary accruals are the proxy for earnings management. Findings & Value added: Using a sample of 221 firms from Warsaw Stock Exchange between 2005 and 2015 I do not find evidence that the increase of pre-IPO discretionary accruals positively affects the sale of primary shares in the IPO, but the analysis has revealed that the deliberate conservative reporting limits the probability of the new shares issuance. In turn, the sale of secondary shares by the original shareholders in IPO is more likely in companies using a conservative earnings management. Furthermore, negative discretionary accruals increase the portion of secondary shares sold in the IPO.

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