Initial public offering research papers

Analysis of ipo

What's more, the financial indicators tend to fall rapidly year on year. Recomm endations The stock performance is closely related to operating performance. Fundamentally the use of proceeds filed SEC are investment, debt repayment, or general corporate purposes Autore et. Even though underpricing exists in the market, there are risks to both the investment banker and the firm. The unfavourable effect on low performing firms may relate to the lack of capacity by these firms to manage investment projects effectively. Journal of Financial Economics 60, In an examination of growth, profitability and stability of listed companies either individually or as a combination, it can be seen that the only industries in which listed companies in China display strong performance are public utilities, transportation and finance. This situation is fruitful for investors. Investment banks can incur a financial loss from expenses associated with remaining shares and possible loss of future business from customers who purchased the initial shares. First, limited availability of data and time constraint has made this limitation inevitable.

The unfavourable effect on low performing firms may relate to the lack of capacity by these firms to manage investment projects effectively. Chicago and London: University of Chicago Press, Both the investment banker and the underwriter play critical roles in this decision.

ipo research papers

Theories proposed that positive earning and operating performance leads to positive investors' reaction which will be the basis for the stock price to be higher and vice versa. The purpose of this study is to investigate the linkages between intended use of the IPO proceeds and the performance of the IPO when it is listed in the stock exchange.

Initial public offering journals

There are consequences for incorrectly pricing the shares. In these circumstances, initial investors are motivated to sell the stock for profit. In addition, the firm is able to expand because of the capital that is raised through this procedure. Another possible factor is the poor corporate governance characteristics of Chinese enterprises. In this transaction, the stock is purchased directly from a company. Uninformed investors are more likely than informed investors to bid for a company, regardless of the IPO Solomon, There has been academic studies of underpricing and theories developed to explain this phenomenon. Theories proposed that positive earning and operating performance leads to positive investors' reaction which will be the basis for the stock price to be higher and vice versa. Originating House and a Syndicate The originating house is an investment firm hired to manage the underwriting and sale of the IPO. Most of the firms in Malaysia issued IPO for these three main purposes. Journal of Finance 58, M. The purpose of this study is to investigate the linkages between intended use of the IPO proceeds and the performance of the IPO when it is listed in the stock exchange. Proceed classifications We then manually collect the data on the intended use of the IPO proceeds for each firm from the prospectus issued and newspaper released prior to the IPO issuance.

The volatility is due to the number of securities that are available, as well as the price of the stock. In addition, the firm is able to expand because of the capital that is raised through this procedure.

Initial public offering research papers

During this process, a prospectus is developed that provides an explanation of the company, the shares that are being offered and the type of ownership structure of the firm. Other than financial information on previous and forecasted future performance, the intended use of the IPO's proceeds information is one of the crucial information for the stakeholders especially the investors as they will be the financial contributor for the purposes.

Uninformed investors are more likely than informed investors to bid for a company, regardless of the IPO Solomon, Another possible factor is the poor corporate governance characteristics of Chinese enterprises.

research paper on ipo performance

Second, the study only classifies the firms into its classification based on their intended use of the IPO proceeds without any other factors and variables which may influence the investors' reaction. Companies that are of great interest to investors are firms with products that are likely to become household names.

The results of this study provide at least a starting point for the conduct of further research to enhance the knowledge of IPO issuance motives influence on market reactions.

The road to creating an IPO.

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(DOC) FIn/ Initial Public Offerings Paper