scholarly journals The Rich Get Richer and the Poor Get Poorer: Social Media and the Post-IPO Behavior of Investors in Biotechnology Firms: The Relationship with Twitter Volume

2021 ◽  
Vol 14 (10) ◽  
pp. 456
Author(s):  
Smadar Siev
Keyword(s):  
Social Media ◽  
Stock Returns ◽  
Initial Public Offering ◽  
Abnormal Returns ◽  
Market Value ◽  
Biotechnology Firms ◽  
The Rich ◽  
Twitter Activity ◽  
Public Offering ◽  
The Relationship

This paper analyzes stock returns for biotechnology firms after initial public offering (IPO) and explores the effect of social media—specifically, Twitter—on these returns. The results indicate positive yet insignificant cumulative average abnormal returns (CAARs) of 1.97% in the first 25 days post-IPO and a decline of tens of percentage points over the following three years. However, after dividing the sample firms into two subsamples according to size, either under or over USD 500 million in market value, the overall results change dramatically. Firms with a market value lower than USD 500 million yield negative CAARs immediately following the IPO; however, this negative CAAR becomes significant only from day 50 onward. Firms with a market value over USD 500 million yield positive CAARs immediately following the IPO, which become significant from day 50, remaining so throughout the following year. These findings can be attributed to the limited duration of investors’ attention, which increases until the end of quiet period and, with small-sized firms, diminishes during the post-IPO years. An examination of Twitter activity and share returns demonstrates a robust correlation between the two, suggesting that investors’ attention to firms may be reflected in their Twitter usage.

scholarly journals MANAJEMEN LABA, RETURN SAHAM, DAN KINERJA OPERASI SEBAGAI PEMODERASI

2017 ◽  
Vol 15 (2) ◽  
pp. 133
Author(s):  
Farid Addy Sumantri ◽  
Purnamawati .
Keyword(s):  
Earnings Management ◽  
Stock Returns ◽  
Initial Public Offering ◽  
Stock Return ◽  
Operating Performance ◽  
Abnormal Returns ◽  
Return On Assets ◽  
One Year ◽  
Public Offering ◽  
The Relationship

<p><em>The purpose of this study was to determine the indications of the practice of earnings management at the time of the IPO, one year after the IPO, and two years after the IPO. This study also examined the effect of earnings management on stock returns and operating performance in moderating the relationship between earnings management and stock returns.</em></p><p><em>The study sample comprised 33 firms that go public in the year 2007 to 2011 using a purposive sampling method. Earnings management is proxied by discretionary accruals using the Modified Jones Model, which used proxy for the stock return is cummulative abnormal returns (CAR), while for the company's operating performance used proxy for the return on assets (ROA).</em></p><p><em>The results showed that there were indications of earnings management at the time of the IPO, one year after the IPO, and two years after the IPO with a lower profit rate. No effect on earnings management is proxied by stock return cummulative abnormal returns (CAR). Operating performance of the company also can not moderate the relationship between earnings management with stock return.</em></p><p><em> </em></p><p><em>Keywords: Earning Management, Initial Public Offering, Cummulative Abnormal Return, </em><em>Return On Asset</em></p>

scholarly journals MANAJEMEN LABA, RETURN SAHAM, DAN KINERJA OPERASI SEBAGAI PEMODERASI

2017 ◽  
Vol 13 (2) ◽  
pp. 61 ◽  
Author(s):  
Farid Addy Sumantri ◽  
Purnamawati ,
Keyword(s):  
Earnings Management ◽  
Stock Returns ◽  
Initial Public Offering ◽  
Stock Return ◽  
Operating Performance ◽  
Abnormal Returns ◽  
Return On Assets ◽  
One Year ◽  
Public Offering ◽  
The Relationship

<p>The purpose of this study was to determine the indications of the practice of earnings<br />management at the time of the IPO, one year after the IPO, and two years after the<br />IPO. This study also examined the effect of earnings management on stock returns<br />and operating performance in moderating the relationship between earnings<br />management and stock returns.<br />The study sample comprised 33 firms that go public in the year 2007 to 2011 using<br />a purposive sampling method. Earnings management is proxied by discretionary<br />accruals using the Modified Jones Model, which used proxy for the stock return is<br />cummulative abnormal returns (CAR), while for the company’s operating<br />performance used proxy for the return on assets (ROA).<br />The results showed that there were indications of earnings management at the time<br />of the IPO, one year after the IPO, and two years after the IPO with a lower profit<br />rate. No effect on earnings management is proxied by stock return cummulative<br />abnormal returns (CAR). Operating performance of the company also can not<br />moderate the relationship between earnings management with stock return.<br />Keywords: Earning Management, Initial Public Offering, Cummulative Abnormal<br />Return, Return On Asset</p>

scholarly journals Study on the Relationship Between the Audit Committee of Ipo Firms and the First-Day Stock Earnings

2020 ◽  
Vol 4 (2) ◽  
pp. 21
Author(s):  
She Zhangying
Keyword(s):  
Regression Analysis ◽  
Stock Returns ◽  
Initial Public Offering ◽  
Audit Committee ◽  
Stock Exchange ◽  
Public Offering ◽  
The Relationship

This paper mainly discusses the relationship between the audit committee of IPO firms and the stock returns on the first day of trading on the stock exchange. Using the sample of 21 firms that made an initial public offering in ASX between 2008 and 2010, Regression analysis was used to conclude that the existence of the audit committee of IPO firms and listed on the first day of the stock returns have no significant direct relationships. The result shows that the audit committee has no effect on the earnings of the first day of listing, and the establishment of the audit committee may not be considered before listing.

Earnings Management and IPO Anomalies—Evidence from Indian Stock Market

2021 ◽  
pp. 227853372199471
Author(s):  
Aprajita Pandey ◽  
J. K. Pattanayak
Keyword(s):  
Earnings Management ◽  
Stock Returns ◽  
Initial Public Offering ◽  
Public Offering ◽  
High Level ◽  
Long Term Performance ◽  
Indian Stock Market ◽  
Term Performance ◽  
The Relationship

This study examines the relationship between the extent of earnings management in a firm, the level of underpricing during an initial public offering (IPO), and their long-term performance. Earnings management has been acknowledged as a matter of concern during IPOs since long; however, its relationship with underpricing and long-term returns remained inconclusive in emerging markets like India. Using a sample of Indian IPO firms, this study finds that firms that manage accruals aggressively in the pre-IPO period have high initial returns and subsequently low stock returns in the post-IPO period. This study also observed that firms that have used abnormal accruals more conservatively while reporting earnings have better returns in the third year after IPO compared to the firms that reported more aggressively. The results are in consonance with the theory of information asymmetry and suggest that valuation of an IPO firm becomes ambiguous with high level of earnings management, which leads to higher underpricing.

scholarly journals Analysis of the impact of Fies on the stock returns from the higher education sector

2019 ◽  
Vol 30 (81) ◽  
pp. 368-380
Author(s):  
Marília Cordeiro Pinheiro ◽  
André Luiz Marques Serrano
Keyword(s):  
Higher Education ◽  
Stock Returns ◽  
Initial Public Offering ◽  
Abnormal Returns ◽  
Ministry Of Education ◽  
Treasury Bonds ◽  
Education Market ◽  
Public Offering ◽  
Higher Education Market ◽  
The Impact

ABSTRACT This article aims to analyze if the issuance of Series E Treasury Bonds (CFT-Es) generates abnormal returns in a higher education stock portfolio and verify if the Brazilian higher education market is efficient in its semi-strong form. The main purpose of CFT-Es is to transfer funds to institutions with the aim of providing finance to students enrolled in private universities. These issuances have effects on the capital market, considering that after the program began, the first initial public offering (IPO) of a Brazilian university occurred. Moreover, according to the National Institute for Educational Studies and Research Anísio Teixeira/Ministry of Education and Culture (Inep/MEC), Brazil has the largest market for higher education in Latin America. Several studies have been conducted to analyze the relationship between monetary policy and financial markets, but this has not occurred within the scope of fiscal policy. Such research is appropriate, considering the discussion on the need to contain government spending, but at the same time stimulate the Brazilian economy. The main contribution of the study is it indicates that the higher education market has tended towards the efficiency hypothesis, considering that in the first analysis, H0 was not rejected for 82% of the windows of events, and in the second analysis, H0 was not rejected for any of the windows of events, with there being no evidence of abnormal gains due to funds being released for the Student Finance Fund (Fies). The event study methodology was used to test the hypotheses of abnormal returns obtained due to CFT-Es being issued through the release of ordinances. A portfolio composed of higher education stocks was elaborated, weighted by the quarterly amount receivable from Fies for each institution, and covering 2009 to 2017. The results show that the stocks of institutions benefiting from Fies tend to react efficiently to CFT-E issuances authorized by the National Treasury.

scholarly journals Allocation of Funds from Public Offerings of Shares (IPO's) in Brazil and Stock Returns

2021 ◽  
Vol 9 (2) ◽  
pp. 46
Author(s):  
George André Willrich Sales ◽  
Rodolfo Leandro de Faria Olivo ◽  
Rodolfo Vieira Nunes ◽  
Fabiana Lopes da Silva
Keyword(s):  
Decision Making ◽  
Stock Returns ◽  
Abnormal Returns ◽  
Allocation Of Resources ◽  
Public Offerings ◽  
The Public ◽  
Data Survey ◽  
Abnormal Stock Returns ◽  
Public Offering ◽  
The Relationship

This study analyzes the relationship between the allocation of funds raised in a public offering of shares and abnormal profitability on the first day of trading. The objective is to identify whether the allocation of resources can be considered for the decision-making of investors. To measure the data, multivariate analysis was used, and the data survey considered the information from the prospectuses of the public offers and the announcements for the closing of the offers, between January 2007 and December 2011. Two hypotheses were tested: one in relation to allocation of resources and another in relation to the group of investors participating in the offer. The results show that there is no relationship between the allocation of resources and the abnormal returns of companies. However, for investors who are part of the company's management, they were related to abnormal stock returns on the first day of trading.

Friends in high places : two essays on the importance of corporate political connections

2015 ◽  
Author(s):  
◽  
Reza Houston
Keyword(s):  
Initial Public Offering ◽  
Political Connections ◽  
Target Firm ◽  
University Of Missouri ◽  
Accounting Performance ◽  
The Public ◽  
Public Offering ◽  
The University ◽  
The Impact ◽  
The Relationship

[ACCESS RESTRICTED TO THE UNIVERSITY OF MISSOURI AT AUTHOR'S REQUEST.] This study is an examination of the relationship between political connections and the undertaking of major firm events. In our first essay, presented in Chapter 3, we examine the impact politically connected appointments have on firm acquisition behavior. Using proxy statements, we create a unique database of politically connected bidders and merger targets. We find that bidders who hire connected individuals to the board or management team are more likely to avoid merger litigation. Connected bidders make more bids after the appointment. These firms also bid on larger targets. We determine there is a positive relation between the control premium and the relative of the target's connections. Connected acquirers have superior post-merger accounting performance, particularly when they acquire a connected target firm. In the second essay, presented in Chapter 4, we examine the relationship between political connections of private firms and the initial public offering process. Using registration statement information, we create a unique database of politically connected IPO firms. We find that political connections are substitutes to high-quality underwriters and big four auditors. Politically connected firms manage earnings more highly upward than non-connected firms prior to the public offering. Politically connected firms also exhibit less underpricing than non-connected firms. Politically connected IPO firms also have superior post-IPO returns relative to non-connected IPO firms.

Groupon: let's make a deal?

2015 ◽  
Vol 11 (1) ◽  
pp. 26-38
Author(s):  
Susan White
Keyword(s):  
Social Media ◽  
Initial Public Offering ◽  
Content Type ◽  
Media Companies ◽  
Secondary Sources ◽  
Long Run ◽  
Public Offering ◽  
Media Firms ◽  
Term Performance

Synopsis Groupon, an online coupon company, was one of many companies that considered an initial public offering (IPO) during what might be a second technology/internet/social media IPO boom in 2011. Some companies chose to postpone their IPOs, while others took advantage of the media attention focussed on technology companies, and in particular, social media firms. Should investors hop on the tech IPO bandwagon, or hold off to better evaluate the long-term prospects of tech companies, and in particular social media companies? Would the valuation of Groupon justify an investment in IPO shares? Research methodology The case was researched from secondary sources, using Groupon's IPO filing information, news articles about the IPO and industry research sources, such as IBIS World. Relevant courses and levels This case is appropriate for an advanced undergraduate or MBA corporate finance or investment elective. Most introductory finance classes do not have the time to cover later chapters in a finance textbook, where information about IPOs is generally found. It could also be used at the end of a core finance course, where the instructor wanted to introduce this topic through a case study of a hard-to-value internet-based company to illustrate the difficulties in setting IPO prices. The case could also be used in an equity analysis class, an entrepreneurial finance class or an investment class, to spur discussion about valuing an internet company and choosing appropriate investments for pension fund investing. This case could also be used in a strategy class, focussing on the five forces question, and eliminating the valuation question. Theoretical basis There is a great deal of literature about IPOs and their long-term performance. An excellent source is Jay R. Ritter's research, http://bear.warrington.ufl.edu/ritter, which has a longer time period and more data than could be contained in this case. IPO puzzles include persistent undervaluing of IPOs; in other words, the offer price is lower than, and sometimes substantially lower than, the first day close price. A second issue is the generally poorer long-run performance of companies after their IPO when compared to similar firms that did not do an IPO.

A new look at the meeting clustering effect

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ángel Pardo ◽  
Eddie Santandreu
Keyword(s):  
Stock Returns ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Relevant Information ◽  
Investor Attention ◽  
Content Type ◽  
Potential Link ◽  
Clustering Effect ◽  
Trading Volumes ◽  
The Relationship

PurposeThe study aims to test the existence of a meeting clustering effect in the Spanish Stock Exchange (SSE).Design/methodology/approachThis paper studies the relationship between the clustering of annual general meetings and stock returns in the SSE. A multivariate analysis is carried out in order to analyse the relationship between monthly returns and the clustering of general meetings in the SSE.FindingsThe authors show that meeting clustering exists and that some months exhibit significant and positive additional returns related to the holding of ordinary or extraordinary general meetings.Research limitations/implicationsThe authors have explored some possible explanations for the meeting clustering effect, such as a potential link with the “Halloween” effect or the presence of higher-than-normal levels of volatility, trading volumes or investor attention. However, none of these can explain the meeting clustering effect that emerges as a new anomaly in the SSE.Practical implicationsThe authors have documented significant and positive abnormal returns in some months that coincide with the holding of general meetings. Therefore, the holding of ordinary and/or extraordinary meetings in some months involves the release of relevant information for investors.Originality/valueThis study complements the financial literature because it is focused on the clustering of meetings and its effect on a stock market whose legal order is based on civil law. This fact allows us to shed new light on meeting clustering and its effect on other types of markets.

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