We study the role of underwriter compensation in mitigating conflicts of interest between companies going public and their investment bankers. Making the bank’s compensation more sensitive to the issuer’s valuation should reduce agency conflicts and thus underpricing. Consistent with this prediction, we show that contracting on higher commissions in U.K. IPOs leads to significantly lower underp...

We report a rare case of intradural primary osteosarcoma (IPOS) in a 74-year-old man with aphasia and right-sided hemiparesis. Radiologic workup revealed a large, partially calcified, left-sided frontotemporal intracranial mass lesion. At surgery, the tumor was found to be entirely intradural; it involved the brain and subarachnoid space of the left sylvian fissure. The adjacent dura was uninvo...

I develop a model of exits from venture capital backed companies based on moral hazard. The focus is on two alternatives: a trade sale and an IPO. The alternatives differ in their governance structure. The model shows that highly profitable companies that need few oversight will go public, while less profitable companies that require more control will be sold. This suggests that the common noti...

This paper provides micro-econometric evidence on the relevance of non-market interaction for the timing of initial public offerings (IPOs) in the French and German primary equity markets. The surge of IPO volume in the late 1990s appears to be consistent with rational expectations, not with adaptive expectations derived from the performance of past IPOs. This finding tends to support the hypot...

We investigate whether mutual funds that invest in initial public offerings (IPOs) outperform the Renaissance IPO Index, IPOX® 100 U.S. and other comparable equity do not IPOs. also explore investors gain diversification benefits by investing IPO-focused funds. Using a sample of active open-ended US funds, we find Index Moreover, they provide with benefit along better returns. value added manag...

We find direct evidence that institutions churn stocks, increase commissions per share and pay unusually high commissions on trades in order to send abnormally high commissions to lead underwriters of upcoming IPOs. These excess commission payments are a particularly effective way for transient investors to receive lucrative IPO allocations. Our results suggest that the underwriter’s concern fo...

We study the role of underwriter compensation in mitigating conflicts of interest between companies going public and their investment bankers. Making the bank’s compensation more sensitive to the issuer’s valuation should reduce agency conflicts and thus underpricing. Consistent with this prediction, we show that contracting on higher commissions in U.K. IPOs leads to significantly lower underp...

This paper investigates why firms include warrants in their initial public offerings (IPOs). We use a dataset of Australian IPOs to reexamine the agency-cost hypothesis, which emphasizes the need for sequential financing for relatively young firms, thus reducing the opportunities for managers to squander money on unprofitable projects. We find support for some of its implications, but not other...

We investigate an IPO security design problem when information asymmetries across investors lead to a winner’s curse. Firms that are riskier in down markets can lower the cost of going public by using unit IPOs, in which equity and warrants are combined into a non-divisible package. Furthermore, firms that have a sizeable growth potential even in bad states of the world can fully eliminate the ...