In this paper we analyze the clustering phenomenon of underpricing in initial public offerings (IPOs), where firms in a particular industry choose to issue their new shares at the same time and at great discounts. The industry consists of many firms that have private information about their own qualities (high or low) and that must raise external capital first before production. In the product ...

Female entrepreneurs and CEOs generally face greater challenges in securing funding to exploit entrepreneurial opportunities, yet contextual factors under which such are more likely arise less understood. We find that female-led initial public offerings (IPOs) incur IPO underpricing, but this effect is moderated by their ownership structure, reflecting different institutional logics these firms...

We examine reverse mergers (RMs) in the biotechnology industry and find that, when compared to initial public offerings (IPOs), RMs are smaller, have significantly lower market valuations relative to size, and generally invest less. We also find that RMs exhibit positive abnormal returns on the announcement date and throughout the first year after the RM event. In looking at liquidity measures,...

This study analyzes the impact of corporate governance structures at the initial public offering (IPO) date. We test hypotheses that firms with more shareholder-oriented governance structures receive higher valuations at the IPO stage and have better long-term performance. Our sample is a set of 107 IPOs of real estate investment trusts (REITs) between 1991 and 1998. Using a single industry and...

Recent studies have documented that various factors such as discretionary accounting accruals, underwriter reputation, venture capital backing, and firm size will affect the long-run performance of IPOs. However, it is not clear whether the return predictability of these attributes are the manifestation of one phenomenon, or independent results. In this study, we use univariate and multivariate...

This paper analyzes a comprehensive data set of 108 non venture-backed, 58 venture-backed and 33 bridge financed companies going public at Germany’s Neuer Markt between March 1997 and March 2000. I examine whether these three types of issues differ with regard to issuer characteristics, balance sheet data or offering characteristics. Moreover, this empirical study contributes to the underpricin...

We analyze institutional allocation in initial public offerings (IPOs) using a new dataset of US offerings between 1997 and 1998. We document a positive relation between institutional allocation and day 1 IPO returns: for instance, institutions get under 60% of overpriced issues but about 75% of underpriced issues. The positive relation is partly explained by the practice of giving institutions...

Online activity of Internet users has proven very useful in modeling various phenomena across a wide range of scientific disciplines. In our study, we focus on two stylized facts or puzzles surrounding the initial public offerings (IPOs) - the underpricing and the long-term underperformance. Using the Internet searches on Google, we proxy the investor attention before and during the day of the ...

We test an explanatory model of Internet firm duration after their initial public offerings (IPOs) using a Cox proportional hazards model and a semi-parametric Bayesian survival analysis. The empirical model shows that industry-, firmand e-commerce related variables, such as the entry of competing IPOs and the selling of digital products or services, can reduce an Internet firm’s hazard rate. I...

This study examines the relative importance of underpricing as a signal of firm value, underwriter certification, subscription levels of shares on offer, and uncertainty surrounding firm value on mispricing of initial public offerings. A sample of 100 Singaporean initial public offerings (IPOs) during the period 1998-2000 indicates that subscription levels of shares on offer have the most signi...