Initial public offering (IPO) underpricing is a costly practice that decreases the IPO proceeds accruing to the issuing firms and can derail a firm's growth objectives. The purpose of this correlational study was to determine the relationship between share retention, underwriter reputation, and IPO underpricing among a population of IPOs issued in Jamaica. The efficient market hypothesis served as the theoretical framework for this study. Archived data for 52 IPOs issued in Jamaica from 1986 to 2018 were collected and Spearman's correlation matrix and heteroscedasticity-consistent standard errors regression analysis were applied. The outcomes of this study indicated no significant relationship between share retention and IPO underpricing, α = .1 and α = .05, r = .059, p = .35; however, there was partial acceptance of the alternative hypothesis that underwriter reputation is related to IPO underpricing at α = .1, r = .234, p = .055, but not α = .05. Additionally, underpricing was higher for IPOs supported by the high reputation underwriters, and share retention was a slightly better predictor of IPO underpricing for this group of IPOs, R2 = .02, p = .31 versus R2 = .01, p = .75. Finally, the overall model indicated that the independent variables did not jointly explain IPO underpricing, F(2, 45) = .78, p = .455, R2 = .032. The results of this study might contribute to social change because successful IPOs can increase employment opportunities as well as improve income distribution and socioeconomic indicators for the communities served by IPO firms.

In recent years, the initial public offerings (IPOs) on the Ghana Stock Exchange (GSE) witnessed some level of undersubscriptions. The purpose of this research was to investigate the extent to which valuation, pricing, and performance of prior IPOs listed on the GSE contributed to this state of undersubscriptions. The research was informed by the valuation and pricing framework of Roosenboom. The research questions addressed whether IPOs on the GSE were under/overpriced and whether the projected and pre-issue financials were free from forecasting errors and earnings management. A cross-sectional, explanatory research design was employed to examine a dataset of 30 sampled IPOs. The dataset, obtained from IPO prospectuses, trading data, and financial statements, was analyzed using both logistic and multiple regressions. IPO valuation methods, first-day returns (R(1st day)), absolute forecast errors (AFE), and discretionary current accruals (DCA) served as dependent variables and firm characteristics of size, age, profitability, dividends, price-to-value (P/V) ratios, owner-manager, and auditors' reputation served as independent variables. Results revealed that firm characteristics were not significant predictors of the choice of IPO valuation methods, IPOs were underpriced and their R(1st day) were significantly predicted by P/V ratios, the financial projections were over forecasted and their AFE were not predicted by the independent variables, and the pre-IPO financials experienced earnings management and their DCA were significantly explained by the owner-manager variable. This research contributes to positive social change by assisting regulators, investment bankers, corporations, and institutional investors in improving their respective roles in the valuation and pricing of IPOs on the GSE, thus reducing the observed IPO undersubscriptions in the stock market.

When a company sells shares of their business to the public for the first time, it is called an Initial Public Offering, IPO. The IPO is usually conducted by the issuing firm to raise capital for their future growth. Before the IPO the information about the issuing company is often limited and the investment in an IPO is associated with risks. The investors who choose to invest in an IPO are therefore usually compensated with a discount on the shares and often experience a first day positive return. This first day positive return is the definition of underpricing. If the majority of the IPOs are underpriced it should be of interest for an investor to take part of this opportunity and use it as an investment strategy. This thesis investigates if there is a way to predict which IPOs that will generate a positive first day return based on the information in the IPO prospect. / En IPO är det första erbjudandet av företagets aktier till den publika marknaden. En IPO genomförs ofta i samband med att företaget behöver ta in nytt kapital för framtida investeringar. Innan ett företag blir publikt är informationsinsynen begränsad vilket medför en risk för den som vill investera i det initiala erbjudandet. Investerarna som väljer att investera i erbjudandet är ofta kompenserade med en rabatt på aktierna och får då ofta en positiv avkastning på första handelsdagen. Denna initiala avkastning definieras som underprissättningen av erbjudandet. Om en majoritet av börsnoteringarna är underprissatta skulle det vara av stort intresse för investerare att upprepande investera i IPOs och ha detta som investeringsstrategi. Den här uppsatsen undersöker om det går att förutspå vilka IPOs som genererar en positiv avkastning första handelsdagen baserat på den informationen som finns att tillgå i IPO prospektet. / Civilekonom-uppsats

Baltijos šalių kapitalo rinkos pripažįstamos kaip augančios ir perspektyvios, tačiau įmonės vis dar nesiryžta dėl įvairių priežasčių įtraukti savo akcijas į vertybinių popierių rinkos prekybos sąrašus. Nors užsienio autorių darbuose yra plačiai nagrinėjamos pirminio viešų akcijų platinimo prielaidos ir pasekmės bendrovėms, mokslinių tyrimų, sistemingai atliekamų Baltijos šalyse, nėra. Šio diplominio darbo tikslas yra ištirti pirminio viešo akcijų platinimo pasekmes bendrovių veiklos rezultatyvumui. Analizuojamos įmonės, OMX biržoje vykdžiusios pirminius viešus akcijų siūlymus 2004 – 2006 m.. Remiantis atliktu tyrimu, teigiama, kad po pirminio viešo akcijų platinimo įmonėse padidėja pardavimai ir pelningumas, išauga investicijos, sumažėja finansinis svertas. Taip pat patvirtinama, kad pirminio viešo akcijų siūlymo pasekmės yra skirtingos didelės, vidutinės ir mažos kapitalizacijos įmonėms. Pirminio viešo akcijų platinimo pasekmės įmonių veiklos rezultatyvumui didelės ir vidutinės kapitalizacijos įmonėms yra teigiamos, tuo tarpu mažos kapitalizacijos įmonės, bent jau nagrinėjamame trumpame laikotarpyje patvirtina užsienio autorių tyrimų rezultatus apie veiklos rezultatyvumo pablogėjimą, vertinant pelningumo rodiklius. / This diploma paper investigates the change in operating performance of firms as they make the transition from private to public ownership. The sample is based on 30 OMX firms that go public during 2004 -2006, examining their financial performance one year prior to the IPO, at the time of the IPO and following year. The firms’ pre-IPO and post-IPO financial performance is compared. Although few recent studies find a decline in operating performance among IPO firms in foreign countries, this paper documents a significant increase in selected measures of financial performance. The results of this paper suggest that IPO firms display high growth in sales, profits, assets and measures of profitability. Moreover, the IPO firms reduce their financial leverage after going public. The results also provide strong support that transition from private to public ownership has different impact on large, medium and small capitalization firms.

There are plenty of things said about the financial industry, an always ongoing debate, to say the least. We have identified a complex situation with three dimensions: Initial public offerings, Venture capital, and Lockup agreements. IPOs are generally difficult to put a price on because the market is not united yet, which creates uncertainties. Venture capital firms invest into startups, often with the incentive of bringing them to an IPO and then make a fast cash out exit. Lockup agreements are contracts that prevent insiders from dumping their shares during a set period in the beginning of the IPO. Additionally, based on the market efficiency theory, a market should always be efficient. But does it play out when these characteristics are affecting each other? The purpose of this research was to investigate whether there are abnormal returns in the financial performance for publicly listed companies on the London Stock Exchange at the end of their lockup period. We sorted on venture capital backed companies and sought to explore differences between VC backed, Non-VC backed firms, and the entire market. The research question for this study is: ‘Does The theoretical aspects of this research’s ontological and epistemological views were set in positivism and objectivism with a deductive approach. The financial performance was key in this research, and it was essential to get ample and appropriate data, therefore a quantitative research method was used with an archival research strategy and explanatory research design. We explored a big research gap in this area after the financial crisis 2008, which made us look at IPOs from 2009 to 2012 with an event window as our time horizon. To answer the research question and fulfill our purpose, four hypotheses were developed with focus on VC backed firms, Non-VC backed firms, the entire market, and one shorter event window. Our results prove that the market efficiency theory does not hold. To answer the research question, we found negative abnormal returns after the lockup expiration date for both Non- VC backed firms and the entire market. However, we were unable to provide a statistically significant result for VC backed firms. There was an extra clear trend during the middle 20 days, and we suggest and encourage to further research with a longer time horizon than [- 20, +20] days.

With the objective of improving their market image and, consequently, the demand for its shares, companies use Corporate Governance practices as a way to increase the consistency of the financial statements and as a guarantee of respect to the minorities shareholders rights. In the last three years, the increase in the number of corporations that performed an IPO in Brazil, has boosted the search to implement Corporate Governance practices in not open capital companies who intend to open their capital. The standard Corporate Governance structure to perform an IPO operation in the new segments of the São Paulo Stock Exchange (BOVESPA) assumes the adoption of practices that, among other characteristics, increase the company disclosure and the strictness in dealing with account and tax issues that can affect their results. Those effects are taken in consideration during the process of the IPO go - no go -decision. In this sense, the objective of the research was to analyze, comparatively to the North-American case, if the structure of the Brazilian tax system has characteristics that motivates or not the IPO decision in the new corporate governance situation. Beyond those features that can have direct effects to the management of results by the companies, the research studied tax and legal aspects that could have indirect influence in the IPO decision, as it stimulates the investment in the stock market and the growing of the capital market. The main motivation for this research was to make clear the challenges that the adoption of the standard corporate governance structure can bring to the companies, in terms of the treatment of its fiscal and tax issues, and its impacts in the IPO decision. / A adoção de práticas de Governança Corporativa (GC), que visem aumentar a transparência das demonstrações financeiras e o respeito aos direitos dos acionistas minoritários, tem sido utilizada com o objetivo de melhorar a percepção das empresas pelo mercado e, consequentemente, a demanda por suas ações. O aumento expressivo do número de companhias que realizaram abertura de capital no Brasil, nos últimos três anos, tem acelerado a busca por implementação de tais práticas de governança em empresas de capital fechado, que tenham como objetivo realizar o IPO (Initial Public Offering). A estrutura de GC definida para a realização de IPO nos novos segmentos de listagem da Bolsa de Valores de São Paulo (BOVESPA) pressupõe a adoção de práticas que, dentre outras características, aumentam a exposição e o rigor no tratamento das questões contábeis e tributárias pelas empresas, podendo ter efeitos em seus resultados. Tais efeitos são levados em consideração durante o processo de tomada de decisão de abertura de capital. Nesse sentido, o objetivo do trabalho foi o de analisar, comparativamente ao caso norte-americano, se a estrutura do sistema tributário brasileiro traz características que incentivam ou não a decisão de abertura de capital na nova realidade de GC. Além desses fatores, que podem ter efeitos diretos para as empresas na gestão de seus resultados, o estudo avaliou aspectos tributários e legais que tenham influência indireta na decisão de abertura de capital, à medida que proporciona estímulos à aplicação em ações e crescimento do mercado de capitais. A principal motivação para a elaboração do estudo foi explicitar os desafios que a adoção da estrutura padrão de GC pode trazer para as empresas, no tocante ao tratamento de suas questões fiscais e tributárias, e seus impactos na decisão de abertura de capital. / Mestre em Economia

Made available in DSpace on 2010-04-20T20:51:35Z (GMT). No. of bitstreams: 3 61060100564.pdf.jpg: 17349 bytes, checksum: d837c6cb5938fcb949cc0d74ead03bf1 (MD5) 61060100564.pdf: 565702 bytes, checksum: 439100ec3690ea1b5453811be8f3b6cf (MD5) 61060100564.pdf.txt: 183906 bytes, checksum: cd1615a368540fef58fa7ea6d396e274 (MD5) Previous issue date: 2008-02-27T00:00:00Z / Normalmente os underwriters recompram ações no mercado secundário dos IPOs coordenados pelos mesmos. O objetivo da recompra é o de postergar ou evitar a queda do valor dos IPOs. As ações recompradas são aquelas provenientes da opção dada pelo emissor ao underwriter para a venda em excesso de até 15% das ações inicialmente ofertadas, opção esta chamada de greenshoe. Esta dissertação analisa os principais determinantes e conseqüências do processo de estabilização de IPOs no Brasil. Os resultados indicam que IPOs estabilizados são aqueles com maior risco inicial de preços, com menor demanda de investidores institucionais nacionais e estrangeiros e que são conduzidos por underwriters de melhor reputação, além disso, o underwriter apreça ex-ante a possibilidade de exercício do greenshoe através da redução da comissão cobrada pela colocação das ações. O greenshoe é normalmente efetivado quando está “no dinheiro”. Quanto aos efeitos no retorno dos IPOs, os resultados indicaram que no Brasil a estabilização, a demanda de investidores institucionais nacionais e estrangeiros e o greenshoe possuem efeito significante nos retornos, efeitos estes que apesar de curto prazo, vão além do período de estabilização, ou seja, após o término das recompras realizadas pelos underwriters. Ademais, após o término da estabilização, o valor das ações dos IPOs em média não caem significativamente, indicando um efeito positivo desta prática no Brasil. Constatou-se também que o nível de preço em que a estabilização é efetuada pelo underwriter, ou seja, se abaixo ou acima do preço líquido de comissão, possui grande poder explicativo sobre o retorno pós-estabilização. Finalmente, o último teste indica que a estabilização de preços é responsável por um terço do underpricing verificado no mercado brasileiro. / Usually underwriters repurchase stocks of their IPOs in the aftermarket, avoiding or postponing the falling of their prices. The issuer gives an option to oversell the IPO up to 15% from the initial offering to the underwriter, then the underwriter can repurchase the stocks when the prices fall below the offer price, giving them back do the issuer. This option is named greenshoe. The aim of this study is to investigate the main causes and results of the stabilization process of Brazilian IPOs. The results show that stabilized IPOs are riskier, have less local and foreign institutional demand and are issued by more reputable underwriters, moreover, the underwriter determine ex-ante the likelihood of exercise of greenshoe, lowering the spread. The greenshoe is usually exercised when is “in the money”. Relating to the effects over the IPOs returns, the study documented that the stabilization, the demand of national and foreign institutional investors and the greenshoe affect significantly the returns, and these effects are maintained even after the end of stabilization, that is, after the end of repurchases of stocks by underwriters. In addition, after the conclusion of stabilization, on average, the IPO value do not fall significantly, indicating the positive effect of stabilization on the Brazilian market as a whole. The level of price of stock repurchases revealed a positive relation with the returns after the stabilization. Finally, the last test indicates that the stabilization account for a third part of observed underpricing.

Submitted by Cristiane Oliveira (cristiane.oliveira@fgv.br) on 2011-06-10T21:14:05Z No. of bitstreams: 1 61080200033.pdf: 1142896 bytes, checksum: d68a7268291f8dffb69301ecf4ccbc46 (MD5) / Approved for entry into archive by Vera Lúcia Mourão(vera.mourao@fgv.br) on 2011-06-10T21:15:07Z (GMT) No. of bitstreams: 1 61080200033.pdf: 1142896 bytes, checksum: d68a7268291f8dffb69301ecf4ccbc46 (MD5) / Approved for entry into archive by Vera Lúcia Mourão(vera.mourao@fgv.br) on 2011-06-10T21:16:20Z (GMT) No. of bitstreams: 1 61080200033.pdf: 1142896 bytes, checksum: d68a7268291f8dffb69301ecf4ccbc46 (MD5) / Made available in DSpace on 2011-06-10T21:36:08Z (GMT). No. of bitstreams: 1 61080200033.pdf: 1142896 bytes, checksum: d68a7268291f8dffb69301ecf4ccbc46 (MD5) Previous issue date: 2011-02-02 / This paper paper analyzes the applicability of civil liability regimes to compensate investors for damages arising from violations of the lead underwriter of initial public offering. The accountability of this agent is based on the duty to act with high standards of care to: (i) ensure the quality of information, (ii) disclose information in a manner that allows the investor make an informed decision, and (iii) act in accordance with the principle of good faith. For this, we studied the regimes of liability subjective, based on the wrongful conduct of the lead underwriter, and strict liability based on the Consumer Protection Code and the risk of financial intermediation activity in public offerings. It is intended to eventually identify the most appropriate regime for compensate the investors damages. / O presente trabalho analisa a aplicabilidade dos regimes de responsabilidade civil para indenizar os investidores por danos decorrentes de infrações do coordenador líder de oferta pública de ações. A responsabilização desse agente tem por base o dever de agir com elevado padrão de diligência para: (i) assegurar a qualidade das informações; (ii) divulgar informações de forma que permita o investidor tomar uma decisão fundamentada; e (iii) atuar em conformidade com o princípio da boa-fé. Para tanto, serão estudados os regimes de responsabilidade civil subjetiva, fundado na conduta culposa do coordenador líder, e de responsabilidade objetiva, com base no Código de Defesa do Consumidor e no risco da atividade de intermediação financeira em ofertas públicas de ações. Pretende-se, por fim, identificar o regime mais apropriado para a reparação de danos dos investidores.

Submitted by Ricardo Fuscaldi de Figueiredo Baptista (rfuscaldi@uol.com.br) on 2011-07-16T21:36:15Z No. of bitstreams: 1 Thesis_RFuscaldi_14.07.2011_IMPRESSÃO.pdf: 2129610 bytes, checksum: 9b4f08f17097d988cfd7a3c2b340dd62 (MD5) / Rejected by Gisele Isaura Hannickel (gisele.hannickel@fgv.br), reason: Bom Dia Ricardo Fuscaldi, O arquivo PDF deve ser inserido já com a ficha catalográfica. O arquivo anexado não consta a mesma. Em caso de dúvidas estamos à disposição. Att, Gisele on 2011-07-18T11:10:02Z (GMT) / Submitted by Ricardo Fuscaldi de Figueiredo Baptista (rfuscaldi@uol.com.br) on 2011-07-18T12:42:05Z No. of bitstreams: 1 Thesis_RFuscaldi_com ficha.pdf: 2271072 bytes, checksum: b4df31e522a6a117529b915607ebdb38 (MD5) / Approved for entry into archive by Gisele Isaura Hannickel (gisele.hannickel@fgv.br) on 2011-07-18T12:45:36Z (GMT) No. of bitstreams: 1 Thesis_RFuscaldi_com ficha.pdf: 2271072 bytes, checksum: b4df31e522a6a117529b915607ebdb38 (MD5) / Approved for entry into archive by Gisele Isaura Hannickel (gisele.hannickel@fgv.br) on 2011-07-18T12:46:57Z (GMT) No. of bitstreams: 1 Thesis_RFuscaldi_com ficha.pdf: 2271072 bytes, checksum: b4df31e522a6a117529b915607ebdb38 (MD5) / Made available in DSpace on 2011-07-18T12:52:30Z (GMT). No. of bitstreams: 1 Thesis_RFuscaldi_com ficha.pdf: 2271072 bytes, checksum: b4df31e522a6a117529b915607ebdb38 (MD5) Previous issue date: 2011-06-16 / The purpose of this study is to empirically analyze the main factors that determine the first-day return and the Flipping activity in Brazilian IPOs, taking into account expected results according to national and international researches. The data base encompasses IPOs that took place between May 2004 and February 2011, summing up to 129 IPOs and approximately R$ 128 billion offering. The first-day return, which means the ‘money left on the table’, was on average 4.6% taking into consideration the issue price, while the Flipping activity totalized R$ 7.2 billion, meaning 5.6% of the offering. The first-day return was analyzed before and after the first trade, and evidences were found supporting (a) the exogenous determination of the issue price, (b) the opening price dependence of prospectus disclosure and of other variables, observable previously to the bookbuilding process, and (c) the cascade behavior of investors in the pricing after the first trade, particularly driven by the underwriter behavior. In regards to the Flipping, it was notorious depending on how much the IPO succeeded, being concentrated in and homogeneous along the first-day, despite the intense negotiation in the first minute. As a general contribution to literature, it was concluded that Information Asymmetry Theory arguments are not sufficient to explain the first-day Underpricing and the Flipping, being necessary arguments based on Behavioral Finance adapted to an intraday perspective. / Este trabalho analisa empiricamente os fatores determinantes do retorno e do ‘Flipping’ no primeiro dia de negociação em IPOs no Brasil, levando em consideração os resultados esperados pela literatura nacional e internacional. A base de dados inclui IPOs realizados entre maio de 2004 e fevereiro de 2011, totalizando 129 IPOs com ofertas primária e/ou secundária e envolvendo em torno de R$ 128 bilhões. O retorno do primeiro dia, que caracteriza o ‘dinheiro deixado na mesa’, foi em média de 4,6% com relação ao preço de emissão, enquanto o ‘Flipping’ totalizou R$ 7,2 bilhões, ou seja, 5,6% da oferta. Para o retorno, analisado antes e depois da abertura, evidenciou-se (a) a determinação exógena do preço de emissão, além da (b) influência no preço de abertura do ‘disclosure’ do prospecto e de outras variáveis observáveis antes do processo de ‘bookbuilding’, como também (c) o comportamento em ‘cascata’ dos investidores na formação de preços após a abertura, particularmente catalisada pela atuação do ‘underwriter’. Já o ‘Flipping’ foi mais proeminente conforme o sucesso do IPO, sendo concentrado no primeiro dia, mas homogêneo ao longo deste, apesar da intensa negociação no primeiro minuto. Como contribuição geral para a literatura, foi constatada a insuficiência dos argumentos baseados na Teoria da Assimetria da Informação na explicação do ‘Underpricing’ e do ‘Flipping’ no primeiro dia, sendo identificada a complementaridade de argumentos baseados em Finanças Comportamentais adaptados para o mercado intradiário

Bakgrund och problem: Private equity-aktörers värdeskapande är ett fenomen som studerats internationellt sedan 80-talet och intensifierats under det senaste årtiondet. Med en mängd forskning angående prestationen under ägandeskapet är utbudet mindre huruvida prestationen är bestående och hur portföljbolagen presterar efter att de avyttrats. Trots detta råder det ingen konsensus kring tidigare studiers resultat. Mot bakgrund av den motstridighet som föreligger i tidigare forskning och den uppmärksammade debatten om riskkapitalisters värdeskapande söker denna studie att studera och undersöka ämnet närmre för den skandinaviska marknaden. Syfte: Studiens syfte är att undersöka hur skandinaviska portföljbolag presterar efter avyttring genom börsintroduktion. Studien ämnar därmed att utreda, kartlägga och skapa bättre förståelse huruvida det föreligger någon skillnad i tidigare PE-ägda portföljbolags prestation gentemot branschkonkurrenter utifrån utvalda nyckeltal. Metod: Studien applicerar en kvantitativ forskningsmetod, vilket är i linje med tidigare forskning och referensstudier som även använder ett parametriskt och ett icke-parametriskt statistiskt test för att utröna om över- eller underprestation föreligger för tidigare PE-ägda portföljbolag. Därefter har studiens resultat analyserats med bakgrund av tidigare forskning och vedertagna teorier inom ämnet. Slutsats: Studiens resultat konstaterar att tidigare PE-ägda portföljbolag som börsnoterats inte överpresterar sina branschkonkurrenter, utan presterar sämre eller endast i linje med dem. Till skillnad från tidigare forskning kan ingen av- eller tilltagande effekt urskiljas, vilket innebär att ägarbytet vid börsnoteringen inte medför några bestående komparativa konkurrensför- eller nackdelar. / Background and problem: Private equity companies’ long-term performance is a phenomena that has been examined internationally since the 80’s, which has intensified over the last decade. With a lot of research focusing on performance during the ownership, the offer is less extensive whether the performance is long-term and how the divested portfolio companies perform after the private equity companies exit. Nevertheless, there is up today no consensus regarding the result of the previous studies. In the light of the contradiction of the previous research and the debate on risk capitalists’ value creation, this study seeks to investigate the phenomena closer on the Scandinavian market. Purpose: The purpose of this study is to investigate how Scandinavian portfolio companies perform after divestment through an IPO. The study thus aims to investigate, plot and create a better understanding of whether there is any difference in past PE-owned portfolio companies’ performance relative industry competitors bases on selected key ratios. Methodology: The study applies a quantitative research method, which in line with previous research and reference studies, uses a statistical parametric and a non-parametric test to determine whether over- or underperformance exists for previous PE-owned portfolio companies. The result of the study have been analyzed in the light of previous research and conventional theories within the field of subject. Conclusions: This study’s findings show that previous private equity owned portfolio companies do not over perform their industry peers, but perform in line or inferior to them. Unlike previous research, no decreasing or increasing effect can be distinguished which means that the change of ownership through the IPO does not bring any long-term comparative competitive advantages or disadvantages.