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IPOs
Terms modified by IPOs Selected AbstractsIs CEO Duality Always Negative?CORPORATE GOVERNANCE, Issue 2 2009An Exploration of CEO Duality, Ownership Structure in the Arab IPO Context ABSTRACT Manuscript type: Empirical Research Question/Issue: This paper examines the relationships between initial public offering (IPO) underpricing, CEO duality, and strategic ownership in 12 Arab countries of the Middle East and North Africa (MENA) region. Research Findings/Results: Using all IPOs from January 2000 until the end of July 2007, we document an average IPO underpricing of 184.1 per cent. Underpricing is higher in IPO firms that have CEO duality. However, strategic shareholders, such as corporations and other industry-related investors, are likely to play a monitoring role whereas underpricing is found to be lower in firms with both CEO duality and strategic shareholder ownership. Moreover, the negative relation between underpricing and strategic blockholding is greater for foreign strategic ownership than it is for domestic strategic ownership. Theoretical Implications: This paper examines the level and determinants of IPO underpricing in the MENA region. It provides evidence on the role played by foreign strategic owners in reducing agency conflicts and information asymmetries within an environment where firms may be affected by the cultural issues related to political ties and family involvement. Practical Implications: Our results contribute to the existing debate on the appropriate regulations for an effective and stable financial system in Arab countries. They offer policy-makers additional evidence on the positive impact of market openness to foreign shareholders. [source] The Influence of Top Management Team Heterogeneity on the Capital Raised through an Initial Public OfferingENTREPRENEURSHIP THEORY AND PRACTICE, Issue 3 2008Monica A. Zimmerman A significant body of research exists on the top management teams (TMTs) of established firms and specifically on the heterogeneity of TMTs of established firms. Little research exists, however, on the heterogeneity of TMTs of firms in the early stages of their existence. In this study, I examine the relationship among TMT heterogeneity and the capital raised by the firm through its initial public offering (IPO). I argue that TMT heterogeneity provides a signal to potential investors about the quality of the IPO and hence is associated with greater capital accumulations. My findings suggest that heterogeneity in the TMT's functional background and educational background is associated with greater capital raised through an IPO. [source] Universal Banking, Asset Management, and Stock UnderwritingEUROPEAN FINANCIAL MANAGEMENT, Issue 4 2009William C. Johnson G24 Abstract This paper examines institutions that underwrite IPOs and have asset management divisions from 1993 through 1998. We provide evidence that these firms use asset management funds as vehicles to help them earn more equity underwriting business. We also show that asset managers affiliated with IPO underwriters use their superior information about their own institution's IPOs to earn annualised market adjusted returns 7.6% above asset managers of firms who did not underwrite the IPO. Superior future returns by asset managers who trade affiliated IPOs are dependent on the information environment for the IPO and the underwriter reputation rank. [source] Differences between European and American IPO MarketsEUROPEAN FINANCIAL MANAGEMENT, Issue 4 2003Jay R. Ritter G24; G32; G14; G15 Abstract This brief survey discusses recent developments in the European initial public offering (IPO) market. The spectacular rise and fall of the Euro NM markets and the growth of bookbuilding as a procedure for pricing and allocating IPOs are two important patterns. Gross spreads are lower and less clustered than in the USA. Unlike the USA, some European IPOs, especially those in Germany, have when-issued trading prior to the final setting of the offer price. Current research includes empirical studies on the valuation of IPOs and both theoretical and empirical work on the determinants of short-run underpricing. [source] The Impact of Fundamentals on IPO ValuationFINANCIAL MANAGEMENT, Issue 2 2009Rajesh Aggarwal We examine how initial public offering (IPO) valuation has changed over time by focusing on three time periods: 1986-1990, January 1997 to March 2000 (designated as the boom period), and April 2000 to December 2001 (designated as the crash period). Using a sample of 1,655 IPOs, we find that firms with more negative earnings have higher valuations than do firms with less negative earnings and firms with more positive earnings have higher valuations than firms with less positive earnings. Our results suggest that negative earnings are a proxy for growth opportunities for Internet firms and that such growth options are a significant component of IPO firm value. [source] Moving from Private to Public Ownership: Selling Out to Public Firms versus Initial Public OfferingsFINANCIAL MANAGEMENT, Issue 1 2008Annette B. Poulsen We study two alternative means to move assets from private to public ownership: through the acquisition of private companies by firms that are public (sellouts) or through initial public share offerings (IPOs). We consider firm-specific characteristics for 1,074 IPO and 735 sellout firms to identify differences in growth, capital constraints, and asymmetric information between the two types of transactions. Our results suggest that firms move to public ownership through an IPO when they have greater growth opportunities and face more capital constraints. We provide a better understanding of the firm-specific characteristics that lead firms to go public. [source] Going Public: An Empirical Investigation of U.S. Bound Israeli IPOsFINANCIAL MARKETS, INSTITUTIONS & INSTRUMENTS, Issue 3 2010Iftekhar Hasan Between 1985,2003, more than 120 Israeli companies went public in the U.S., bringing the accumulated number of U.S. bound, Israeli initial public offerings (IPOs) to a figure greater than all other foreign countries combined. In this study, we compare the short and long run performance of Israeli IPOs to that of similar international and U.S. IPOs. Holding all else equal, we find that Israeli IPOs are significantly less underpriced than their local and foreign counterparts. As we examine the characteristics of Israeli issuers, we find that they differ than those of other foreign and local issuers in some important dimensions that compensate investors for information asymmetry and risk. First, compared to their home market capitalization size, U.S. bound Israeli IPOs, are significantly larger than the IPOs conducted by their foreign counterparts. Second, Israeli issuers tend to perform better than other foreign and U.S. local IPOs during our entire period of observation. Third, to a large extent, the Israeli firms in our sample have products, licensing or franchising relationships or venture capital funds with strong roots in the U.S. prior to the IPO. And fourth, the relevant investor community of Israeli IPOs, at least at the early stages, is small and overwhelmingly American. Our findings are consistent with prior studies documenting that firms raising capital outside of their domicile country are typically a select group of high quality firms in need of external financing that cannot be sufficiently provided in their home market. [source] Uncertain Demand, Heterogeneous Expectations, and Unintentional IPO UnderpricingFINANCIAL REVIEW, Issue 1 2006Bruce K. Gouldey G12; G24; G30 Abstract Distinguishing between intentional and unintentional incentives to underprice initial public offerings (IPOs), I develop sufficient conditions for the winners' curse postulated by Miller (1977) and implications for intertemporal changes in the magnitude of underpricing. Specifically, I show that unintentional underpricing (and occasional overpricing) of IPOs is a consequence of investors' heterogeneous expectations of the uncertain value of a stock when the supply is constrained and the underwriter's price discovery process only partially identifies aggregate demand. Moreover, an IPO that is oversubscribed in the premarket sale almost certainly will experience a short-term price increase in the secondary market. [source] Does an Industry Effect Exist for Initial Public Offerings?FINANCIAL REVIEW, Issue 4 2003Aigbe Akhigbe G14 Abstract We examine the impact of initial public offerings (IPOs) on rival firms and find that the valuation effects are insignificant. This insignificant reaction can be explained by offsetting information and competitive effects. Significant positive information effects are associated with IPOs in regulated industries and the first IPO in an industry following a period of dormancy. Significant negative competitive effects are associated with larger IPOs in competitive industries, those in relatively risky industries, those in high-performing industries, and those in the technology sector. IPO firms that use the proceeds for debt repayment appear to represent a more significant competitive threat to rival firms relative to IPO firms that use their proceeds for other purposes. [source] Risk disclosures on the second tier markets of the London Stock ExchangeACCOUNTING & FINANCE, Issue 4 2009Paula Hill G32 Abstract The identification, management and disclosure of risks have been the subject of recent legislation, directives and reporting standards issued across a number of international jurisdictions. To inform the disclosure debate, this paper provides a detailed analysis of the risk warning disclosures of initial public offering (IPO) companies and the factors that drive such disclosures. We find that risk disclosures of IPO companies contain a greater proportion of forward-looking information but a lower proportion of information on internal controls and risk management than the disclosures of listed companies. We find evidence that such disclosure has increased across time but that larger directors' shareholdings are associated with a reduction in risk disclosure. [source] Ambiguous incorporations: microfinance and global governmentalityGLOBAL NETWORKS, Issue 2 2010ROB AITKEN Abstract In the spring of 2007 an event dramatically reshaped conversations relating to microfinance. This event was the Initial Public Offering (IPO) of Mexico's largest microfinance organization, Compartamos. The IPO, as this article suggests, is indicative or a broader trend through which microfinance is increasingly becoming financialized, increasingly becoming governable as a financial object. This is important at one level because it crystallizes some of the key issues at stake as microfinance becomes increasingly more reliant on global capital markets. At another level, however, the Compatarmos case is significant because of the conceptual issues it raises in relation to global finance. The main argument I put forward in this article is that the Compatarmos case , and the process of financialization it represents , is important because it allows us to glimpse global finance, and the question of global financial governance, as a decentred process in formation. Drawing on a Foucauldian notion of governmentality, I argue that the Compatarmos case orbits around two processes; processes of incorporation and differentiation. In this context, the Compartamos case implies the importance of analyses that can make global finance visible as a diverse and mundane object that is never settled in any final kind of way. [source] Audit quality, auditor compensation and initial public offering underpricingACCOUNTING & FINANCE, Issue 3 2008Xin Chang G32; D82; M42 Abstract We jointly study the impact of audit quality on auditor compensation and initial public offering (IPO) underpricing using a sample of Australian firms going public over the period 1996,2003. We find that quality (Big Four) audit firms earn significantly higher fees than non-Big Four auditors, and audit quality is positively associated with IPO underpricing. The positive relation between audit quality and underpricing is more pronounced for small issues, IPOs underwritten by non-prestigious underwriters, and those that are not backed by venture capitalists. Taken together, our results suggest that quality auditors serve as a signalling device that enhances post-issue market value of equity. [source] Corporate governance, insider ownership and operating performance of Australian initial public offeringsACCOUNTING & FINANCE, Issue 3 2004Maria C. A. Balatbat We examine ownership structures and corporate governance attributes of 313 Australian initial public offerings (IPOs) between 1976 and 1993 and their relation with up to 5 years of post-listing operating performance, adjusted for similar (non-IPO) firms. Consistent with prior share price-based evidence, we find that the operating performance of Australian IPOs typically deteriorates over the first 4 post-listing years. Any evidence of a positive association between insider ownership and firm performance is confined to the fourth and fifth years after the IPO. Evidence of a positive relation between institutional ownership and performance is restricted to the latter part of our 5-year post-listing window. Board composition (i.e. outsider versus insider control) is not associated with operating performance, although there is some evidence that independent board leadership is associated with better operating performance. [source] Country-Specific Risk and the Cost and Benefit of Audit Quality: Evidence from Israeli Initial Public Offerings in the United StatesINTERNATIONAL JOURNAL OF AUDITING, Issue 3 2002Edward B. Douthett Jr. We examine audit fees and returns to auditor reputation for Israeli entrepreneurs making initial public offerings (IPOs) of equity in U.S. capital markets. We find that the cost of audit quality in terms of audit fees is higher, and the benefit of audit quality in terms of IPO proceeds is lower for a sample of Israeli IPOs matched to a control sample of U.S. IPOs. The results suggest that the higher levels of country-specific risk in Israel are modifying the cost and benefits of audit quality for Israeli entrepreneurs selling securities in the U.S. [source] Demand and Supply of Auditing in IPOs: An Empirical Analysis of the Québec MarketINTERNATIONAL JOURNAL OF AUDITING, Issue 3 2000Jean Bédard This study examines the factors affecting the demand for higher-quality auditors at the time of an initial public offering in a small market characterized by low-litigation risk, government subsidies for companies going public, and the presence of large non-Big Six auditors, namely, the Canadian province of Québec. Our results, from an analysis of 212 Québec IPOs between 1983 and 1997, indicate that the choice of an auditor at the time of an IPO is significantly affected by the company's risk, size, and geographical dispersion. They also suggest that the Québec audit market is segmented between three types of service providers: the Big Six, the National firms and the Local firms. Local firms audit small local companies with low risk, National firms audit large local companies with moderate risk, and the Big Six audit large geographically dispersed companies with high risk. [source] Southern hemisphere cyclones and anticyclones: recent trends and links with decadal variability in the Pacific OceanINTERNATIONAL JOURNAL OF CLIMATOLOGY, Issue 11 2007Dr Alexandre Bernardes Pezza Abstract The aim of this paper is to study the association between the extratropical Southern Hemisphere and the decadal variability in the Pacific Ocean (PO). We discuss a pattern of coherent large-scale anomalies and trends in cyclone and anticyclone behaviour in light of the climate variability in the PO over the ERA40 reanalysis period (1957,2002). The two representative PO indices are the Pacific Decadal and Interdecadal Oscillations (PDO and IPO), and here the PDO is chosen owing to it being less associated with the southern oscillation index (SOI). Composites of the indicators of the density and intensity of cyclones/anticyclones given by an automatic tracking scheme were calculated for the years when the PDOI was more than one standard deviation above or below its mean. Although the ERA40 is not free from noise and assimilation changes, the results show a large-scale feature, which seems to be robust and agrees with earlier studies using different data sets. The sea-level pressure shows a strong annular structure related to the PDO, which is not seen for the SOI, with lower pressure around Antarctica during the positive phase and vice versa. More intense (and fewer) cyclones and anticyclones were observed during the positive PDO. This is less consistent for the SOI, particularly during the summer when a different PDO/SOI pattern arises at high latitudes. The trends project a pattern coincident with the positive PDO phase and seem to be linked with the main climate shift in the late seventies. Trends observed over the Tasman Sea are consistent with declining winter rainfall over southeastern Australia. Most patterns are statistically significant and seem robust, but random changes in ENSO may play a part, to a certain degree, in modulating the results, and a physical mechanism of causality has not been demonstrated. Although global warming and related changes in the Southern Annular Mode (SAM) may also help explain the observed behaviour, the large-scale response presented here provides a new insight and would be of considerable interest for further modelling studies. Copyright © 2007 Royal Meteorological Society [source] A mid-shelf, mean wave direction climatology for southeastern Australia, and its relationship to the El Niño,Southern Oscillation since 1878 A.D.INTERNATIONAL JOURNAL OF CLIMATOLOGY, Issue 13 2005Ian D. Goodwin Abstract Coastal systems behave on timescales from days to centuries. Shelf and coastal wave climatological data from the Tasman Sea are only available for the past few decades. Hence, the records are too short to investigate inter- and multidecadal variability and their impact on coastal systems. A method is presented to hindcast monthly mid-shelf mean wave direction (MWD) for southeastern Australia, based on the monthly, trans-Tasman mean sea-level pressure (MSLP) difference between northern NSW (Yamba) and the north island of New Zealand (Auckland). The MSLP index is calibrated to instrumental (Waverider buoy) MWD data for the Sydney shelf and coast. Positive/negative trans-Tasman MSLP difference is significantly correlated to southerly/easterly Sydney MWD, and to long/short mean wave periods. The 124-year Sydney annual (MWD) time series displays multidecadal variability, and identifies a significant period of more southerly annual MWD during 1884 to 1914 than in the period since 1915. The Sydney MWD is significantly correlated to the Southern Oscillation Index (SOI). The correlation with the SOI is enhanced during periods when the Interdecadal Pacific Oscillation (IPO) is in its negative state and warm SST anomalies occur in the southwest Pacific region. The Sydney MWD was found to be associated with Pacific basin-wide climate fluctuations associated with the El Niño-Southern Oscillation (ENSO). Southerly/easterly Sydney MWD is correlated with low/high MSLP anomalies over New Zealand and the central Pacific Ocean. Southerly/easterly Sydney MWD is also correlated with cool/warm SST anomalies in the southwest Pacific, particularly in the eastern Coral Sea and Tasman Sea. Copyright © 2005 Royal Meteorological Society. [source] Interdecadal Pacific Oscillation and South Pacific climateINTERNATIONAL JOURNAL OF CLIMATOLOGY, Issue 14 2001M.J. Salinger Abstract The Interdecadal Pacific Oscillation (IPO) has been shown to be associated with decadal climate variability over parts of the Pacific Basin, and to modulate interannual El Niño,Southern Oscillation (ENSO)-related climate variability over Australia. Three phases of the IPO have been identified during the 20th century: a positive phase (1922,1944), a negative phase (1946,1977) and another positive phase (1978,1998). Climate data are analysed for the two most recent periods to describe the influence of the IPO on decadal climate trends and interannual modulation of ENSO teleconnections throughout the South West Pacific region (from the equator to 55°S, and 150°E to 140°W). Data coverage was insufficient to include the earliest period in the analysis. Mean sea level pressure (SLP) in the region west of 170°W increased for the most recent positive IPO period, compared with the previous negative phase. SLP decreased to the east of 170°W, with generally more southerly quarter geostrophic flow over the region. Annual surface temperature increased significantly southwest of the South Pacific Convergence Zone (SPCZ) at a rate similar to the average Southern Hemisphere warming. Northwest of the SPCZ temperature increases were less, and northeast of the SPCZ more than the hemispheric warming in surface temperature. Increases of annual precipitation of 30% or more occurred northeast of the SPCZ, with smaller decreases to the southwest, associated with a movement in the mean location of the SPCZ northeastwards. The IPO modulates teleconnections with ENSO in a complex way, strengthening relationships in some areas and weakening them in others. For New Zealand, there is a consistent bias towards stronger teleconnections for the positive IPO period. These results demonstrate that the IPO is a significant source of climate variation on decadal time scales throughout the South West Pacific region, on a background which includes global mean surface temperature increases. The IPO also modulates interannual ENSO climate variability over the region. Copyright © 2001 Royal Meteorological Society [source] Industry Clustering in Nordic Initial Public Offering MarketsINTERNATIONAL REVIEW OF FINANCE, Issue 1-2 2006P. Joakim Westerholm ABSTRACT We present institutional features of the Nordic initial public offering (IPO) markets and relate initial return, long-run performance and size of companies listed during 1991,2002 to industry clustering and level of listing requirements. High industry clustering is related to higher initial return and lower long-run performance supporting our prediction that information asymmetry has an impact on initial underpricing while temporary overvaluation affects long-run performance. The relatively high listing requirements and targeting of the main market have not protected the Nordic IPOs from poor long-run performance. On two markets, Norway and Denmark, IPOs outperform the all share market index. [source] The Reach of the Disposition Effect: Large Sample Evidence Across Investor Classes,INTERNATIONAL REVIEW OF FINANCE, Issue 1-2 2006Philip Brown ABSTRACT We examine detailed daily Australian Stock Exchange share registry data for investors in IPO and index stocks between 1995 and 2000 and find that the ,disposition effect,' investors' reluctance to crystallize losses and relative eagerness to realize gains, is pervasive across investor classes. However, traders instigating larger investments tend to be affected less by the disposition bias. Our novel findings include that (a) the disposition effect ameliorates over time, being undetectable from around 200 trading days after purchase, (b) the ,house money' effect tempers the disposition effect, (c) shareholder loyalty schemes also partially offset investors' relative preference for selling winning stocks, and (d) the reversal of the disposition effect in June (the last month of the Australian tax year) does not occur among investors unable to take advantage of tax shields. In line with earlier research, our results support a tax-related explanation for the June effect rather than window dressing or momentum explanations. Finally, we confirm Odean's finding that the disposition effect is not driven by diversification motives, or by higher transaction costs associated with lower-priced stocks. [source] Do Expert Informational Intermediaries Add Value?JOURNAL OF ACCOUNTING RESEARCH, Issue 4 2003Evidence from Auditors in Microcap Initial Public Offerings Do expert informational intermediaries add value? We address this question by examining the informativeness of the audit report contained in the prospectus associated with a firm's initial public offering (IPO). At the time of the IPO, there is a relative lack of information to facilitate the establishment of equity values, suggesting that the information provided by outside "experts" (e.g., auditors, underwriters) is particularly important. In this article we study small, non-venture-backed IPOs, a segment of the market with the poorest long-run performance and where the prestigious audit firm is often the sole (if any) expert present. We find that the pre-IPO opinions of larger auditors are more predictive of post-IPO negative stock delistings. Of particular note, the opinions of the national-tiered firms are comparably predictive to those of the Big 6, though this finding emerges only after we consider the selectivity-based differences in the clients that hire these national firms. Our findings also indicate that, for larger auditors the presence of a pre-IPO going-concern opinion is more strongly associated with first-year stock returns and that larger auditors are more likely to give such opinions to their distressed clients. Overall, we address a deficiency in the literature relating to "the paucity of evidence on the value of auditor opinions to investors" (Healy and Palepu [ 2001 p. 415]). [source] RECENT DEVELOPMENTS IN GERMAN CAPITAL MARKETS AND CORPORATE GOVERNANCEJOURNAL OF APPLIED CORPORATE FINANCE, Issue 3 2001Eric Nowak Financial economists continue to point to Germany as a relatively successful model of a "bank-centered," as opposed to a market-based, economy. But few seem to recognize that, in the years leading up to World War I, German equity capital markets were among the most highly developed in the world. Although there are now only about 750 companies listed on German stock exchanges, in 1914 there were almost 1,200 (as compared to only about 600 stocks then listed on the New York Stock Exchange). Since German reunification in 1990, there have been signs of a possible restoration of the country's equity markets to something like their former prominence. The last 10 years have seen important legal and institutional developments that can be seen as preparing the way for larger and more active German equity markets, together with a more "shareholder-friendly" corporate governance system. In particular, the 1994 Securities Act, the Corporation Control and Transparency Act passed in 1998, and the just released Takeover Act and Fourth Financial Market Promotion Act all contain legal reforms that are essential conditions for well functioning equity markets. Such legal and regulatory changes have helped lay the groundwork for more visible and dramatic milestones, such as the Deutsche Telekom IPO in 1996, the opening of the Neuer Market in 1997, and, perhaps most important, the acquisition in 2000 of Mannesmann by Vodafone, the first successful hostile takeover of a German company. [source] The Role of the Underlying Real Asset Market in REIT IPOsREAL ESTATE ECONOMICS, Issue 1 2005Jay C. Hartzell A leading explanation for IPO cycles is time-varying supply and demand for the underlying assets of the firms that are considering going public. We test this hypothesis using REIT IPOs, taking advantage of the relative transparency of the underlying real asset markets. We document links between REIT IPO activity and both the conditions of the underlying real estate market and the price of REITs. We find no significant relation between the heat of the IPO market and post-IPO operating performance, implying homogeneous firm quality across IPO cycles. Finally, we show that lagged IPO proceeds are related to future increases in investment and in capacity utilization. [source] Initial Public Offerings: An Analysis of Theory and PracticeTHE JOURNAL OF FINANCE, Issue 1 2006JAMES C. BRAU ABSTRACT We survey 336 chief financial officers (CFOs) to compare practice to theory in the areas of initial public offering (IPO) motivation, timing, underwriter selection, underpricing, signaling, and the decision to remain private. We find the primary motivation for going public is to facilitate acquisitions. CFOs base IPO timing on overall market conditions, are well informed regarding expected underpricing, and feel underpricing compensates investors for taking risk. The most important positive signal is past historical earnings, followed by underwriter certification. CFOs have divergent opinions about the IPO process depending on firm-specific characteristics. Finally, we find the main reason for remaining private is to preserve decision-making control and ownership. [source] Do Initial Public Offering Firms Purchase Analyst Coverage with Underpricing?THE JOURNAL OF FINANCE, Issue 6 2004MICHAEL T. CLIFF ABSTRACT We report that initial public offering (IPO) underpricing is positively related to analyst coverage by the lead underwriter and to the presence of an all-star analyst on the research staff of the lead underwriter. These findings are robust to controls for other determinants of underpricing and to controls for the endogeneity of underpricing and analyst coverage. In addition, we find that the probability of switching underwriters between IPO and seasoned equity offering is negatively related to the unexpected amount of post-IPO analyst coverage. These findings are consistent with the hypothesis that underpricing is, in part, compensation for expected post-IPO analyst coverage from highly ranked analysts. [source] Bids and Allocations in European IPO BookbuildingTHE JOURNAL OF FINANCE, Issue 5 2004TIM JENKINSON ABSTRACT This paper uses evidence from a data set of 27 European IPOs to analyze how investors bid and the factors that influence their allocations. We also make use of a unique ranking of investor quality, associated with the likelihood of flipping the IPO. We find that investors perceived to be long-term holders of the stock are consistently favored in allocation and in out-turn profits. In contrast to Cornelli and Goldreich (2001), we find little evidence that more informative bids receive larger allocations or higher profits. Our results cast doubt upon the extent of information production during the bookbuilding period. [source] Price Discovery in Initial Public Offerings and the Role of the Lead UnderwriterTHE JOURNAL OF FINANCE, Issue 6 2000Reena Aggarwal We examine the price discovery process of initial public offerings (IPOs) using a unique dataset. The first quote entered by the lead underwriter in the five-minute preopening window explains a large proportion of initial returns even for hot IPOs. Significant learning and price discovery continues to take place during these five minutes with hundreds of quotes being entered. The lead underwriter observes the quoting behavior of other market makers, particularly the wholesalers, and accordingly revises his own quotes. There is a strong positive relationship between initial returns and the time of day when trading starts in an IPO. [source] INVESTORS ADJUST EXPECTATIONS AROUND SELL-SIDE ANALYST REVISIONS IN IPO RECOMMENDATIONSTHE JOURNAL OF FINANCIAL RESEARCH, Issue 1 2009Deepika Bagchee Abstract In this article I compare investor response to sell-side analyst recommendation revisions of initial public offering (IPO) firms in the first three years after issue with that of a benchmark control sample of firms that have been public longer. I test whether investors in IPO firms adjust their initially optimistic expectations as information about new issues is released and uncertainty is resolved. In support of my hypothesis that investors adjust expectations downward, I find abnormally negative returns around analyst revisions of IPO firm recommendations. Additionally, I find the effect of analyst revisions on long-run performance of IPO firms is economically significant. [source] LEGISLATION AND REPORTS: Copyright and Parody: Taking Backward the Gowers Review?THE MODERN LAW REVIEW, Issue 5 2010Article first published online: 17 AUG 2010, Ronan Deazley In 2006 the Gowers Review of Intellectual Property made a series of recommendations for reforming the intellectual property regime to better serve the interests of both consumers and industry. Among the proposed recommendations was that an exception for parody be introduced within the Copyright Designs and Patents Act 1988. In January 2008 the Intellectual Property Office (the IPO) launched the first part of a two-stage consultation process on exceptions to copyright. As part of that consultation process, the IPO proposed a ,fair dealing style exception' for parody, and sought views on whether a new exception should be introduced as well as what form it might take. In December 2009 the IPO launched the second stage of this consultation process. The second consultation document rejected the case for a new parody exception. This article considers the place of parody within the copyright regime and the objections levelled against the introduction of an exception set out within the IPO's second consultation document. It invites the IPO to reconsider its decision not to recommend the introduction of a specific exception for parody within the UK. [source] Regulatory Environment, Changing Incentives, and IPO Underpricing in the Korean Stock Market,ASIA-PACIFIC JOURNAL OF FINANCIAL STUDIES, Issue 2 2010Inseok Shin G24; G28; G32 Abstract I examine the importance of price support regulation in explaining IPO underpricing in the Korean stock market from 2001 through 2007. In contrast to the US practice where price support is provided effectively at the cost of the issuing firms, the price support in Korea resulted in direct costs to the underwriters. I construct a simple model to capture this feature of the regulation where IPO prices are determined through the interaction of the maximizing behaviors of underwriters and issuers. In the model, three variables, namely, the expected post-IPO price volatility, size of newly issued shares, and size of tradable shares, are specified to affect the opportunity costs of underpricing. When combined with the regulatory regime change in 2003, which lightened underwriters' obligations towards price support, the model implies that the magnitudes of the relationships between the three variables and underpricing have decreased since 2003. I test the hypotheses and find supportive empirical results: the relationship of underpricing with the expected price volatility has changed from positive to insignificant; those with sizes of newly issued and tradable shares from insignificant to negative. The findings contrast with existing Korean studies that do not find any evidence that price support regulation decreased the opportunity cost of underpricing for underwriters. The results also illustrate a more general point that to fully understand underpricing in a given stock market, it is crucial to take into account the regulatory environment that systematically influences agents' incentives to control or generate underpricing. [source] | |||||||||||||||||||||||||||||||