Investor awareness or information asymmetry? Wikipedia and IPO underpricing

2021 ◽  
Author(s):  
Thomas Boulton ◽  
Bill B. Francis ◽  
Thomas Shohfi ◽  
Daqi Xin
Keyword(s):  
Information Asymmetry ◽  
Ipo Underpricing ◽  
Investor Awareness

Investor Awareness or Information Asymmetry? Wikipedia and IPO Underpricing

2018 ◽  
Author(s):  
Thomas Jason Boulton ◽  
Bill B. Francis ◽  
Thomas Shohfi ◽  
Daqi Xin
Keyword(s):  
Information Asymmetry ◽  
Ipo Underpricing ◽  
Investor Awareness

scholarly journals An empirical study of IPO underpricing: Evidence from Chinese stock market

2014 ◽  
Vol 12 (1) ◽  
pp. 139-152 ◽  
Author(s):  
Tianxiang Xu ◽  
Yujie Zhao
Keyword(s):  
Empirical Study ◽  
Information Asymmetry ◽  
Initial Public Offerings ◽  
Initial Public Offering ◽  
Chinese Stock Market ◽  
Short Term ◽  
Ipo Underpricing ◽  
Public Offerings ◽  
Public Offering ◽  
Different Characteristics

Initial public offerings, as one of the most important activities for firms, have raising massive amount of researches. Regarding China, the stock markets are experiencing a massive level of IPO underpricing, which leads to trillions of dollars leaved on the table. This study is conducted for the question why Chinese IPO are so heavily underpriced and the determinants of IPO underpricing, also the possibility of IPO be underpriced in China. We confirm again that Chinese IPOs are heavily underpriced and the average underpricing level is about 110%. Further, Chinese IPO will experience a negative short term return starting from 10 days after listing, and there are significantly different characteristics for state owned IPOs and private IPOs. This study finds that information asymmetry, proportion of state owned share and risk are the mainly determinants of IPO underpricing in China. Additionally, one of the biggest reason that Chinese initial public offering is underpriced so much is because of government participation, since we find that firms with larger proportion of government state owned shares will be more underpriced.

Factor Analysis of Underestimation for the Russian Companies IPO

2017 ◽  
Vol 2017 (4) ◽  
pp. 29-51
Author(s):  
Varvara Nazarova
Keyword(s):  
Factor Analysis ◽  
Information Asymmetry ◽  
Host Country ◽  
Significant Influence ◽  
Ipo Underpricing ◽  
Two Factors ◽  
The Subject ◽  
Main Factors

The problem of IPO underpricing became relevant in the late 1960s. Since then various theories were advanced connecting this phenomenon to many factors: from information asymmetry in the market to the cultural peculiarities of the host country. The article aims to identify factors that have a significant influence on the occurrence and magnitude of underpricing of shares in Russian companies preparing their IPOs. Research and theories of foreign and Russian authors devoted to the subject were analyzed, which uncovered 7 main factors, which are further considered in terms of their influence on the occurrence and magnitude of underpricing. To test the hypotheses, data for 138 IPOs of Russian companies for 1996-2015 was collected. Analysis showed that two factors influence the occurrence and the magnitude of the underpricing of Russian companies’ IPOs: the amount of accommodation and the provision of accommodation prices in the price corridor, announced by the company. In conclusion, recommendations for Russian issuers on the formation of the strategies of the IPO are made.

Stage financing and syndication in the IPO underpricing of venture-backed firms: Venture capital and IPO underpricing

2019 ◽  
Vol 20 (4) ◽  
pp. 289-300 ◽  
Author(s):  
Awounou-N’dri Honorine ◽  
Dubocage Emmanuelle
Keyword(s):  
Venture Capital ◽  
Information Asymmetry ◽  
Initial Public Offerings ◽  
Capital Investment ◽  
Ipo Underpricing ◽  
Data Set ◽  
Public Offerings ◽  
Venture Capital Investment ◽  
Ipo Performance ◽  
The Impact

The article investigates the impact of stage financing and syndication practices on the underpricing level of venture-backed firms (VBFs) undertaking their initial public offerings (IPOs). This empirical study uses a unique hand-collected data set concerning more than 260 VBFs that went public on Euronext Paris and Alternext between 1997 and 2013. Our findings suggest a lower level of underpricing for firms backed by syndicated venture capital investment. Additionally, we find that the syndicate size is negatively associated with the level of underpricing. However, there is no evidence that stage financing has a significant impact. Syndication thus appears to be the only relevant mechanism to improve IPO performance (measured by the underpricing level), as it reduces agency costs and information asymmetry between the different stakeholders in an IPO process.

scholarly journals Presence of analyst before IPO and underpricing: a Meta-analysis.

2021 ◽  
Vol 10 ◽  
pp. 114-129
Author(s):  
Udayan Karnatak ◽  
Chirag Malik
Keyword(s):  
Emerging Markets ◽  
Information Asymmetry ◽  
Meta Analysis ◽  
Conclusive Evidence ◽  
Ipo Underpricing ◽  
Positive Role ◽  
Moderator Variables ◽  
The Us ◽  
Meta Regression

The effect of analyst presence on underpricing has shown a contrasting result. By synthesizing the result using meta-analysis for twelve studies with more than 20400 firms we found conclusive evidence of the relation between analyst presence and underpricing of IPOs. With the increase in analyst presence by 1% the IPO underpricing increases by 4.9%. Moreover, meta-regression between effect size and moderator variables found the significant and positive role of the reputed underwriter to increase underpricing when the IPO has coverage of analysts. Our results are striking for the US market IPOs in which reputed underwriters as moderator affect underpricing significantly and positively which shows reputation increase information asymmetry. Whereas in emerging markets IPOs reputed underwriters increase market efficiency and information symmetry.

scholarly journals Enterprises’ R&D Investment, Venture Capital Syndication and IPO Underpricing

2021 ◽  
Vol 13 (13) ◽  
pp. 7290
Author(s):  
Xuemeng Guo ◽  
Kai Li ◽  
Siyi Yu ◽  
Bolu Wei
Keyword(s):  
Venture Capital ◽  
Information Asymmetry ◽  
Adverse Selection ◽  
Significant Positive Correlation ◽  
Ipo Underpricing ◽  
Positive Correlation ◽  
The Relationship ◽  
D Investment

Based on the data of companies that got ChiNext listed from 2009 to 2018, this paper empirically studies the relationship among R&D investment, venture capital (VC) syndication and IPO underpricing. It is found that there is a significant positive correlation between R&D investment and IPO underpricing, indicating that the higher the R&D investment is, the higher the IPO underpricing degree is; the intervention of VC syndication plays a role of “adverse selection” instead of giving play to its advantages of sharing information, which intensifies the positive correlation between R&D investment and IPO underpricing. Further analysis shows that the reputation of the leading VC in syndication can play a negative regulating role; the higher the reputation of the leading VC is, the more it can play the “certification effect”, reduce the information asymmetry caused by R&D investment, therefore alleviating the IPO underpricing caused by R&D investment.

scholarly journals THE DETERMINANTS OF MANAGEMENT FORECASTS ERROR AND THE IPO UNDERPRICING: A CASE STUDY OF INDONESIAN IPO

2011 ◽  
Vol 3 (2) ◽  
pp. 136-152
Author(s):  
Yanthi Hutagaol ◽  
Florens Siauw ◽  
Irwan A. Ekaputra
Keyword(s):  
Information Asymmetry ◽  
Stock Exchange ◽  
Market Condition ◽  
Forecast Errors ◽  
Management Forecasts ◽  
Ipo Underpricing ◽  
Earning Forecast ◽  
Expected Earnings ◽  
Forecast Interval

To reduce the well-known information asymmetry in the IPO market, the issuing firms are required to publish offering prospectuses. One type of information disclosed in the prospectus is the management financial forecasts in which the IPO firms predict expected earnings at the end of year after the listing. The purpose of this study is to investigate the determinants of forecasted error published by the management in the IPO prospectuses. This study observes six possible determinants that affect the absolute forecast errors (AFE). Furthermore, this study also examines whether the earning forecast errors could explain the IPO stylish underpricing phenomenon.A sample of 124 IPO firms that went public in Indonesian Stock Exchange (prior Jakarta Stock Exchange) during the 1997 – 2005 period. The results show that the research models proposed are valid models. The management AFE is determined by firm size, forecast interval period, industry, and the firm business range.  This study also finds that the AFE is positively related to the IPO underpricing, suggesting that the higher the forecast errors, the more underpriced is the IPO. Moreover, it is also found that market condition also influences the underpricing level in Indonesian IPO market.

scholarly journals INFORMASI AKUNTANSI DAN NON AKUNTANSI PADA FENOMENA UNDERPRICING YANG TERJADI SAAT PENAWARAN UMUM SAHAM PERDANA PADA PERUSAHAAN YANG TERDAFTAR DI BURSA EFEK INDONESIA

2017 ◽  
Vol 18 (3) ◽  
Author(s):  
Lydia Kurniawan
Keyword(s):  
Information Asymmetry ◽  
Initial Public Offering ◽  
Stock Exchange ◽  
Stock Exchanges ◽  
Ipo Underpricing ◽  
Return On Assets ◽  
True Value ◽  
Initial Return ◽  
The World ◽  
Public Offering

Abstract: In order to expand their business in several ways, for example companies can offer their shares to the general public. Underpricing is a phenomenon that often appears and is experienced by companies that conduct an Initial Public Offering on the various stock exchanges in the world, where the IPO price is set lower than the true value of the company. Underpriced shares often occur because of information asymmetry or inequality of information that occurs in the group of investors who have information and a group of investors who do not have the information about the prospects of the issuer company. This study examined whether the age of the firm, firm size, and return on assets (ROA) affect the level of IPO underpricing on the company at the Indonesian Stock Exchange. This study was measured by Initial Return underpricing. The objects in this study are 32 companies that did the initial public offering in 2002 to 2004 at the Indonesia Stock Exchange and experienced under pricing . Conclusions from the study indicate that the companies age and their size variables are not shown to affect the dependent variable Underpricing, while the variable Return on Assets (ROA) Under pricing are shown to affect the dependent variable at a significant level of 5%.

scholarly journals Does ownership structure effect IPO underpricing: Evidence from Thai IPOs

2006 ◽  
Vol 3 (2) ◽  
pp. 106-115 ◽  
Author(s):  
Sunder Venkatesh ◽  
Suman Neupane
Keyword(s):  
Regression Model ◽  
Information Asymmetry ◽  
Ownership Structure ◽  
Financial Crises ◽  
Negative Relationship ◽  
Rank Correlation ◽  
Ownership Concentration ◽  
Ipo Underpricing ◽  
Signaling Hypothesis ◽  
The Relationship

The study utilizes a unique set of IPOs data in Thailand post Asian Financial crises to identify the relationship between initial market adjusted underpricing and the ownership concentration. We find that a weak but a negative relationship exists between the two and therefore to certain extent refuting the signaling hypothesis of high ownership and high underpricing. We employ a rank correlation to identify the association between the two variables. A regression model using the widely used proxies of information asymmetry model fails to up hold the information asymmetry model in the context of Thai IPOs.

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