Accounting and stock performance of initial public offerings and seasoned equity offerings : evidence in China

2004 ◽  
Author(s):  
Liangyi Ouyang
Keyword(s):  
Initial Public Offerings ◽  
Seasoned Equity Offerings ◽  
Equity Offerings ◽  
Stock Performance ◽  
Public Offerings

scholarly journals Bookbuilding e Alocação Estratégica: Evidência do Mercado Brasileiro de Ações

2006 ◽  
Vol 4 (1) ◽  
pp. 33
Author(s):  
Richard Saito ◽  
José André C. M. Pereira
Keyword(s):  
Initial Public Offerings ◽  
Strong Evidence ◽  
Seasoned Equity Offerings ◽  
Secondary Market ◽  
Discretionary Power ◽  
Equity Offerings ◽  
Investment Bank ◽  
Public Offerings ◽  
Allocation Criteria

We examine four bookbuilding processes on the Brazilian stock market executed by an investment bank from 2003 to 2004. In a bookbuilding process, the investment bank has the discretionary power in pricing and in allocating shares to investors. We analyze the allocation determinants and we find empirical evidence that bookbuilding does induce investors to disclose superior information. However there is strong evidence that issues related to majority controlling position, liquidity on secondary market, and flipping activities impact on allocation criteria. We find differences between allocation determinants derived from (a) initial public offerings and (b) seasoned equity offerings, but in both cases there is a tendency to favor long term investors.

The Impact of IPOs’ Analyst Coverage on the Choice and Timing of SEOs

2018 ◽  
pp. 330-358
Author(s):  
Nesrine Bouzouita ◽  
Carole Gresse
Keyword(s):  
Survival Analysis ◽  
Initial Public Offerings ◽  
Seasoned Equity Offerings ◽  
Equity Offerings ◽  
Analyst Coverage ◽  
Public Offerings ◽  
Firm Commitment ◽  
The Impact

Based on a survival analysis on a sample of initial public offerings (IPOs) undertaken on Euronext and their subsequent seasoned equity offerings (SEOs) over the period 1995–2012, this chapter shows that analyst coverage in the months following an IPO facilitates subsequent SEOs and favors the longevity of the firm’s relationship with its initial underwriter. SEOs are facilitated in several dimensions: post-IPO analyst coverage increases the likelihood of the IPO firm to conduct an SEO with a firm commitment underwriting; it increases the occurrence speed of that SEO; and it increases the probability of that SEO to be intermediated by the same underwriter as the IPO.

Lockups Revisited

2005 ◽  
Vol 40 (3) ◽  
pp. 519-530 ◽  
Author(s):  
James C. Brau ◽  
Val E. Lambson ◽  
Grant McQueen
Keyword(s):  
Moral Hazard ◽  
Adverse Selection ◽  
Initial Public Offerings ◽  
Empirical Support ◽  
Seasoned Equity Offerings ◽  
Comparative Statics ◽  
Equity Offerings ◽  
Public Offerings ◽  
Theoretical Predictions ◽  
Adverse Selection Problem

AbstractLockups are agreements made by insiders of stock-issuing firms to abstain from selling shares for a specified period of time after the issue. Brav and Gompers (2003) suggest that lockups are a bonding solution to a moral hazard problem and not a signaling solution to an adverse selection problem. We challenge this conclusion theoretically and empirically. In our model, insiders of good firms signal by putting and keeping (locking up) their money where their mouths are. Our model yields two comparative statics: lockups should be shorter when a firm is i) more transparent and/or ii) more risky. Using a sample of 4,013 initial public offerings and 3,279 seasoned equity offerings between 1988 and 1999, we find empirical support for our theoretical predictions.

Early wealth effects of regional ADRs

2015 ◽  
Vol 11 (2) ◽  
pp. 198-214 ◽  
Author(s):  
Mark Schaub
Keyword(s):  
Initial Public Offerings ◽  
Latin American ◽  
Seasoned Equity Offerings ◽  
Wealth Effects ◽  
Equity Offerings ◽  
Short Term ◽  
Content Type ◽  
Public Offerings ◽  
Market Index ◽  
The Us

Purpose – The purpose of this paper is to determine what types of short-term wealth effects accrued to European and Latin American American Depository Receipt (ADR) investors and whether these were affected by the type of issue (initial public offerings (IPO) vs seasoned equity offerings (SEO)) or the date of issue (1990s vs 2000s). Design/methodology/approach – Standard ADR and IPO excess return methodology is utilized to compute and test excess returns against a US investment benchmark. This methodology is used in many ADR and IPO studies. Findings – European SEOs listed in the 2000s did better than those listed in the 1990s. The results for European IPOs were the opposite. Latin American SEOs did better relative to the US market index for issues listed in the 1990s as compared to those listed in the 2000s. Once again the results for Latin American IPOs were the opposite. Originality/value – This study differs from previous studies by emphasizing differences in short-term return behaviour for Latin American and European ADRs listed during a decade of US market stability (the 1990s) vs those listed in the 2000s when the US stock market encountered times of extreme return volatility. These timing differences affect not only the returns of all the ADRs but also show how ADR IPOs and SEOs tend to have opposite return behaviour based on timing. These return differences are important because the major benefits of portfolio diversification are achieved when asset returns are less correlated with each other.

The Underpricing of Initial Public Offerings and Private Placements of Equity in China

2018 ◽  
pp. 572-591
Author(s):  
Gang Nathan Dong ◽  
Ming Gu
Keyword(s):  
Initial Public Offerings ◽  
Seasoned Equity Offerings ◽  
Equity Offerings ◽  
Publicly Traded ◽  
Ipo Underpricing ◽  
Public Offerings ◽  
Private Placements ◽  
Strategic Role ◽  
International Setting

While the costs borne by firms in raising external capital through initial public offerings (IPOs) and seasoned equity offerings are well documented, the strategic role of IPO underpricing in the market for raising equity after the IPO remains largely unstudied, particularly in an international setting. In China publicly traded firms often issue post-IPO equity through private placements of equity (PEPs), rather than public offerings. This chapter examines the relationship between the pricing behavior of IPOs and the issuance choice of future PEPs. Do companies use IPO underpricing as a strategic precursor toward raising additional capital in future PEPs? If the success of initial offerings of equity can help improve the capital-raising capacity and reduce the issuance cost in subsequent offerings, high-quality firms will intentionally pursue a multiple-issue strategy by lowering the IPO offer price in order to raise more capital at a higher price in PEPs.

Auditor Changes and the Pricing of Seasoned Equity Offers

2006 ◽  
Vol 20 (4) ◽  
pp. 333-349 ◽  
Author(s):  
Yongtae Kim ◽  
Myung Seok Park
Keyword(s):  
Initial Public Offerings ◽  
Positive Association ◽  
Seasoned Equity Offerings ◽  
Shopping Behavior ◽  
Equity Offerings ◽  
Public Offerings ◽  
Opinion Shopping ◽  
Practical Standpoint ◽  
Prior Literature

While prior literature examines the role of auditors in the pricing of initial public offerings, little is known about the effect of auditor changes on the pricing of seasoned offers. Our examination of seasoned equity offerings shows that companies switching auditors prior to the offerings underprice their offers more than do companies without changes. While we provide evidence of issuers' opportunistic accounting decisions that are consistent with their opinion-shopping behavior, the positive association between underpricing and auditor changes suggests that switchers bear a net cost compared to non-switchers. From a practical standpoint, our findings alert a company considering a change of its auditor prior to a new equity issue.

Does Sentiment Drive the Retail Demand for IPOs?

2009 ◽  
Vol 44 (1) ◽  
pp. 85-108 ◽  
Author(s):  
Daniel Dorn
Keyword(s):  
Initial Public Offerings ◽  
Institutional Investors ◽  
Equity Offerings ◽  
Public Offerings ◽  
Trading Decisions ◽  
Retail Trading ◽  
Public Equity ◽  
Retail Demand ◽  
As If

AbstractIndividual and institutional investors can trade German initial public equity offerings on an as-if/when-issued basis before the start of secondary trading. Using actual when-issued trades made by a sample of clients at a large German retail broker during 1999 and 2000, the paper documents that retail buyers consistently overpay for initial public offerings (IPOs) in the when-issued market relative to the immediate aftermarket. The observed willingness to overpay points to sentiment as a driver of retail trading decisions. Consistent with this interpretation and with sentiment affecting prices, IPOs that are aggressively bought by individuals in the when-issued market exhibit high first-day returns as well as poor aftermarket returns relative to benchmarks of similar stocks.

scholarly journals Long-Term Performance Of Foreign Food And Beverage Equities Traded On The New York Stock Exchange: A Look At Investment Opportunities

2011 ◽  
Vol 5 (3) ◽  
Author(s):  
R. Stephen Elliott ◽  
Mark Schaub
Keyword(s):  
New York ◽  
Initial Public Offerings ◽  
Stock Exchange ◽  
Seasoned Equity Offerings ◽  
New York Stock Exchange ◽  
Equity Offerings ◽  
Excess Returns ◽  
Great Opportunity ◽  
York Stock Exchange ◽  
Food And Beverage

Because of the growth of international trade and the increase in sales and profits in the food and beverage industry in recent years investors may believe there is a great opportunity to reap high returns from foreign equities. Cumulative excess returns from all newly issued foreign food and beverage equities over a 36-month period following the date listed on the New York Stock Exchange are tested for significant differences in performance to determine whether they outperform the S & P 500 returns. Although the 36-month cumulative excess returns are not significant, findings indicate that the food and beverage ADRs performed 13.55 percent lower than the S & P 500 Index which serves as a proxy for the market in general. Food and beverage seasoned equity offerings outperformed initial public offerings.

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