What Explains the Initial Return of Initial Public Offerings after the 1997 Asian Financial Crisis? Evidence from Thailand

2013 ◽  
Author(s):  
Chaiporn Vithessonthi
Keyword(s):  
Financial Crisis ◽  
Initial Public Offerings ◽  
Asian Financial Crisis ◽  
Public Offerings ◽  
Initial Return

scholarly journals Sins for some, virtues for others: Media coverage of investment banks’ misconduct and adherence to professional norms during the financial crisis

2018 ◽  
Vol 72 (9) ◽  
pp. 1436-1463 ◽  
Author(s):  
Thomas J Roulet
Keyword(s):  
Financial Crisis ◽  
Initial Public Offerings ◽  
Media Coverage ◽  
Investment Banks ◽  
Professional Misconduct ◽  
Public Offerings ◽  
Professional Norms ◽  
The Face ◽  
Corporate Customers

Why does professional misconduct persist in the face of media scrutiny? In this study, we explain how professional norms can be at odds with societal norms and how the behaviours they trigger can be perceived as misconduct. Most audiences tend to disapprove of wrongdoings, but specific stakeholders may interpret this disapproval as an indication of the focal organization’s level of adherence to professional norms. Building on mixed methods, we explore the case of the investment banking industry during the financial crisis and suggest that corporate customers were favourably biased by the reporting of banks’ misconduct in the print media as they linked it to the banks’ quality of service. We capture the extent to which banks are associated with misconduct, signalling their adherence to negatively perceived professional norms. We then look at how such signalling affects the likelihood for banks to be invited into initial public offerings syndicates. Our findings show that the more banks are disapproved of for their wrongdoings, the more likely they are to be selected to join a syndicate. This study suggests that the coverage of misconduct can actually act as a positive signal providing banks with incentives to engage in what is broadly perceived as professional misconduct.

Management Disclosures of Going Concern Uncertainties: The Case of Initial Public Offerings

2018 ◽  
Vol 93 (6) ◽  
pp. 29-59 ◽  
Author(s):  
Khrystyna Bochkay ◽  
Roman Chychyla ◽  
Srini Sankaraguruswamy ◽  
Michael Willenborg
Keyword(s):  
Information Content ◽  
Initial Public Offerings ◽  
Financial Incentives ◽  
Bad News ◽  
Mediating Effects ◽  
Public Offerings ◽  
Going Concern ◽  
Start Up ◽  
Initial Return ◽  
Management Disclosures

ABSTRACT We study the information content and determinants associated with voluntary management disclosures of going concern (GC) uncertainties by IPO issuers. In terms of information content, we examine IPO price revision and initial return and find robust support that management GC disclosures are associated with downward revisions in the IPO offer price and, upon considering the mediating effects of the price revision, also associated with lower initial returns. In terms of determinants, and after controlling for other factors (e.g., issuer distress, start-up status, size, cash burn), we find that the presence of a management GC disclosure is negatively associated with a proxy for issuer financial incentives to withhold “bad news” and positively associated with the extent of risk factors disclosure. Overall, our results provide support for the information content of voluntary management disclosures of GC uncertainties by IPO issuers, the presence of which is associated with agency and risk motivations. JEL Classifications: G24; G32; M13; M41.

scholarly journals Another piece of the puzzle: REIT IPO underpricing after the financial crisis

2017 ◽  
Vol 35 (3) ◽  
pp. 264-276 ◽  
Author(s):  
Bill Dimovski ◽  
Christopher Ratcliffe ◽  
Monica Keneley
Keyword(s):  
Financial Crisis ◽  
Initial Public Offerings ◽  
Global Financial Crisis ◽  
Ipo Underpricing ◽  
Content Type ◽  
Public Offerings ◽  
Industrial Companies ◽  
Retail Investors ◽  
The Global Financial Crisis ◽  
Academic Debate

Purpose The purpose of this paper is to investigate the underpricing of real estate investment trust (REIT) initial public offerings (IPOs) from January 2010 to June 2015, as the sector recovered from the global financial crisis. Design/methodology/approach This study analyses the first day returns of US REIT IPOs in the post financial crisis period. The study then employs regression analysis to examine the factors that influence IPO underpricing. Findings The study observes that underpricing, on average, is not significantly different to zero. Furthermore, the REIT IPOs examined display underperformance in the longer term. In contrast to the earlier data samples of Chen and Lu (2006), the authors do not find that underwriting costs are a direct substitute for the indirect cost of underpricing, instead the authors find that higher underwriting costs are associated with higher underpricing. Also in contrast to the mainstream underpricing literature, the data suggest larger capital raisings require higher underpricing. The authors also find that newly listed REITs provided significant excess dividend returns over the post-listing period. Practical implications For institutional and retail investors, the results will help to further inform investment opportunities in REIT IPOs. Originality/value This paper adds to the ongoing academic debate of the lack of underpricing in REIT IPOs relative to industrial companies. Research has shown periods of underpricing are often replaced with periods of overpricing suggesting that the pattern of behavior in REIT markets is substantially different.

Industry-Average Earnings Management and IPO Pricing

2019 ◽  
Vol 22 (04) ◽  
pp. 1950023
Author(s):  
Joseph R. Rakestraw ◽  
Raman Kumar ◽  
John J. Maher
Keyword(s):  
Earnings Management ◽  
Initial Public Offerings ◽  
Secondary Market ◽  
Share Price ◽  
Partial Adjustment ◽  
Public Offerings ◽  
Initial Return ◽  
Ipo Pricing

We examine the effects of signed industry-average earnings management on the pricing of initial public offerings (IPOs). We posit that the variation in an IPOs earnings management is related to industry-average earnings management and, therefore, provides useful information regarding the IPO valuation. We find that higher industry-average earnings management negatively affects the pre-issuance price update and the initial return of IPOs. Our findings lend support to the partial adjustment phenomenon of IPO pricing which suggests information that influences valuation is partially incorporated in the initial offer price and more fully incorporated in the share price during the first-day of secondary market trading.

scholarly journals Size of Offer, Over-subscription Ratio and Performance of Malaysian IPOs

2020 ◽  
Author(s):  
Othman Yong ◽  
Puan Yatim ◽  
Ros Zam Zam Sapian
Keyword(s):  
Initial Public Offerings ◽  
Significant Positive Correlation ◽  
Stock Exchange ◽  
Kuala Lumpur ◽  
Public Issue ◽  
Positive Correlation ◽  
Public Offerings ◽  
Long Run ◽  
Initial Return ◽  
And Performance

This paper examines the initial and the long-run performance of initial public offerings (IP0s) stocks listed on the Main Board of the Kuala Lumpur Stock Exchange. This study finds a significant mean initial return and mean over-subscription ratio, even-though not as high as reported in earlier studies. Size of offer is not correlated with the over-subscription ratio. In general, initial returns. are significantly higher than returns for subsequent longer-term holding periods. Mean initial returns among the three types of issue compared are not significantly different from each other Only in the case of offer for sale that we find a significant positive correlation between its over-subscription ratio and its initial return. Offer for sale also shows a positive correlation between its over-subscription ratio and its raw let11111 far day-365, but turns significantly negative for day-910 and day-] 095. In the case of combination of public issue and offer for sale, over-subscription ratio is not significantly correlated with longer- term returns, for either raw or adjusted return. Finally, in the case of public issue, its over-subscription ratio is significantly correlated with its raw return only for day-180 and day-540, and for its adjusted return, the correlation is significant only for day-180 and day-365.  

scholarly journals EMPIRICAL INVESTIGATION OF THE UNDERPRICING PHENOMENON ON IPOs IN PRIVATIZATION OF SOEs: EVIDENCE FROM INDONESIA

2011 ◽  
Vol 3 (2) ◽  
pp. 109-135
Author(s):  
Monika Setiobudi ◽  
Dezie L. Warganegara ◽  
Doni S. Warganegara
Keyword(s):  
Initial Public Offerings ◽  
Budget Deficit ◽  
Empirical Investigation ◽  
Descriptive Statistics ◽  
Public Offerings ◽  
Initial Return ◽  
Short Run ◽  
Kolmogorov Smirnov ◽  
Privately Owned ◽  
Smirnov Test

The Objective this empirical research is conducted with the main purpose to assess whether the short-run underpricing level of IPOs on privatization is lower or not compared to the privately owned enterprises in Indonesia. The aim is intended to identify whether the presence of excessive underpricing is occurred among the Privatization IPOs in Indonesia. Method are used to fullfil the objective, the samples are derived from both SOEs and Non-SOEs that conducted the Initial Public Offerings (IPO) during period 2000-2009. The total final samples used are 147 samples. Moreover, this research focuses on the initial return of the first trading day to determine the underpricing level. The data is also analyzed by using descriptive statistics, Kolmogorov Smirnov test, parametric tests, Non-parametric tests and Multiple Regression Analysis. Result of the research shows the evidence that the extent of underpricing is significantly lower in IPOs conducted by the SOEs compared to the privately owned in Indonesia. Furthermore, the result also clarifies that there is no occurrence of excessive underpricing within the Privatization IPOs in Indonesia.Conclusion is the degree of underpricing within the SOEs is proven to be lower than the Non-SOEs. This fact is supported by the reasons of tight standardize legislation, underwriter’s reputation, budget deficit in Indonesia, and well-established industry within the SOEs.

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