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“The Performance of Private Equity and non-Private Equity Backed Initial Public Offerings”: A Study of Underpricing and Long-Run Stock Performance on the European Stock Exchanges

Åstrand, Camilla and Landgren, Ylva (2011)
Department of Business Administration
Abstract
The analysis shows that underpricing exists on the European market during 1999-2010 and that PE backed firms usually experience a lower underpricing than non-PE backed companies. Maturity, earnings management and company size are variables explaining underpricing for PE firms. For non-PE backed IPOs, earnings management is the only statistically significant variable explaining the underpricing. In the sample used, there is no difference in long-run stock performance between PE and non-PE backed firms. However, different variables explain the long-run stock performance depending on the firm being PE and non-PE backed. Operating margin affects the long-run stock performance for PE backed IPOs, while company size explains the long-run... (More)
The analysis shows that underpricing exists on the European market during 1999-2010 and that PE backed firms usually experience a lower underpricing than non-PE backed companies. Maturity, earnings management and company size are variables explaining underpricing for PE firms. For non-PE backed IPOs, earnings management is the only statistically significant variable explaining the underpricing. In the sample used, there is no difference in long-run stock performance between PE and non-PE backed firms. However, different variables explain the long-run stock performance depending on the firm being PE and non-PE backed. Operating margin affects the long-run stock performance for PE backed IPOs, while company size explains the long-run performance for non-PE backed firms. In addition, the underpricing size does not affect long-run stock performance. (Less)
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author
Åstrand, Camilla and Landgren, Ylva
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
IPOs, underpricing, long-run stock performance, private equity, European Stock Exchanges, Management of enterprises, Företagsledning, management
language
Swedish
id
2004270
date added to LUP
2011-05-23
date last changed
2012-04-02 19:07:49
@misc{2004270,
  abstract     = {The analysis shows that underpricing exists on the European market during 1999-2010 and that PE backed firms usually experience a lower underpricing than non-PE backed companies. Maturity, earnings management and company size are variables explaining underpricing for PE firms. For non-PE backed IPOs, earnings management is the only statistically significant variable explaining the underpricing. In the sample used, there is no difference in long-run stock performance between PE and non-PE backed firms. However, different variables explain the long-run stock performance depending on the firm being PE and non-PE backed. Operating margin affects the long-run stock performance for PE backed IPOs, while company size explains the long-run performance for non-PE backed firms. In addition, the underpricing size does not affect long-run stock performance.},
  author       = {Åstrand, Camilla and Landgren, Ylva},
  keyword      = {IPOs,underpricing,long-run stock performance,private equity,European Stock Exchanges,Management of enterprises,Företagsledning, management},
  language     = {swe},
  note         = {Student Paper},
  title        = {“The Performance of Private Equity and non-Private Equity Backed Initial Public Offerings”: A Study of Underpricing and Long-Run Stock Performance on the European Stock Exchanges},
  year         = {2011},
}