Initial Underpricing and Long-Run Aftermarket Performance of Private Equity Backed and Non-Sponsored IPOs - An Empirical Study on the Nordic Main Markets
(2016) BUSN89 20161Department of Business Administration
- Abstract
- This paper investigates differences in initial underpricing and long-run aftermarket performance between private equity-backed and non-sponsored IPOs on the Nordic main markets between 1998-2012. First-day returns are calculated to measure the initial underpricing, while a BHAR approach is used to investigate the long-run aftermarket performance. Using a sample of 227 IPOs (59 private-equity backed and 168 non-sponsored), the results in this paper suggest that both private equity-backed and non-sponsored IPOs are initially underpriced. In line with previous research, private equity-backed IPOs are found to be less initially underpriced than non-sponsored IPOs. Regarding the long-run aftermarket performance, the only significant result is... (More)
- This paper investigates differences in initial underpricing and long-run aftermarket performance between private equity-backed and non-sponsored IPOs on the Nordic main markets between 1998-2012. First-day returns are calculated to measure the initial underpricing, while a BHAR approach is used to investigate the long-run aftermarket performance. Using a sample of 227 IPOs (59 private-equity backed and 168 non-sponsored), the results in this paper suggest that both private equity-backed and non-sponsored IPOs are initially underpriced. In line with previous research, private equity-backed IPOs are found to be less initially underpriced than non-sponsored IPOs. Regarding the long-run aftermarket performance, the only significant result is the 12-month BHAR for the non-sponsored group, which suggests an abnormal return of 10,79 %. No statistically significant results are found on a 24 or 36-month time horizon. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/8885901
- author
- Arborelius, Petter LU and Ristiniemi, Alexander
- supervisor
- organization
- course
- BUSN89 20161
- year
- 2016
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- IPO, Private Equity, Initial Return, BHAR, Hot Issue Market
- language
- English
- id
- 8885901
- date added to LUP
- 2016-08-22 12:43:10
- date last changed
- 2016-08-22 12:43:10
@misc{8885901, abstract = {{This paper investigates differences in initial underpricing and long-run aftermarket performance between private equity-backed and non-sponsored IPOs on the Nordic main markets between 1998-2012. First-day returns are calculated to measure the initial underpricing, while a BHAR approach is used to investigate the long-run aftermarket performance. Using a sample of 227 IPOs (59 private-equity backed and 168 non-sponsored), the results in this paper suggest that both private equity-backed and non-sponsored IPOs are initially underpriced. In line with previous research, private equity-backed IPOs are found to be less initially underpriced than non-sponsored IPOs. Regarding the long-run aftermarket performance, the only significant result is the 12-month BHAR for the non-sponsored group, which suggests an abnormal return of 10,79 %. No statistically significant results are found on a 24 or 36-month time horizon.}}, author = {{Arborelius, Petter and Ristiniemi, Alexander}}, language = {{eng}}, note = {{Student Paper}}, title = {{Initial Underpricing and Long-Run Aftermarket Performance of Private Equity Backed and Non-Sponsored IPOs - An Empirical Study on the Nordic Main Markets}}, year = {{2016}}, }