Underpricing of Sponsor Backed and Non-Sponsor Backed IPOs in US Market
(2018) NEKN02 20181Department of Economics
- Abstract
- The dissertation examines the underpricing of sponsor-backed (private equity backed and venture capital backed) and non-sponsor backed initial public offerings (IPOs) listed on all US stock exchanges between January 1997 and December 2017. The authors identify 403 PE-backed IPOs, 179 VC-backed IPOs and 1469 non-sponsor (non-PE and non-VC) backed IPOs. Evidence suggests that PE-backed firms are larger, older and more highly levered than VC counterparts. Following, the level of underpricing of PE-backed IPOs are then compared with VC-backed and non-sponsor backed counterparts. Results indicate that sponsor-backed IPOs experience lower levels of underpricing and among these three groups, on average, PE-backed IPOs experience the lowest level... (More)
- The dissertation examines the underpricing of sponsor-backed (private equity backed and venture capital backed) and non-sponsor backed initial public offerings (IPOs) listed on all US stock exchanges between January 1997 and December 2017. The authors identify 403 PE-backed IPOs, 179 VC-backed IPOs and 1469 non-sponsor (non-PE and non-VC) backed IPOs. Evidence suggests that PE-backed firms are larger, older and more highly levered than VC counterparts. Following, the level of underpricing of PE-backed IPOs are then compared with VC-backed and non-sponsor backed counterparts. Results indicate that sponsor-backed IPOs experience lower levels of underpricing and among these three groups, on average, PE-backed IPOs experience the lowest level of underpricing. After controlling for individual firm characteristics, on average, the study finds limited support for certification effect of sponsor-backing. The relationships between certification effect and the three variables (size, age and leverage) are further analysed in both VC and PE groups. The study found statistically significant evidence which suggests that firm age has an inverse relationship with the extent of certification effect in PE-backed IPOs. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/8957813
- author
- Low, Jamie Wei Yee LU and Siow, Weijie LU
- supervisor
- organization
- course
- NEKN02 20181
- year
- 2018
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Initial public offering, venture capital, private equity, sponsor, underpricing
- language
- English
- id
- 8957813
- date added to LUP
- 2018-09-24 14:05:51
- date last changed
- 2018-09-24 14:05:51
@misc{8957813,
abstract = {{The dissertation examines the underpricing of sponsor-backed (private equity backed and venture capital backed) and non-sponsor backed initial public offerings (IPOs) listed on all US stock exchanges between January 1997 and December 2017. The authors identify 403 PE-backed IPOs, 179 VC-backed IPOs and 1469 non-sponsor (non-PE and non-VC) backed IPOs. Evidence suggests that PE-backed firms are larger, older and more highly levered than VC counterparts. Following, the level of underpricing of PE-backed IPOs are then compared with VC-backed and non-sponsor backed counterparts. Results indicate that sponsor-backed IPOs experience lower levels of underpricing and among these three groups, on average, PE-backed IPOs experience the lowest level of underpricing. After controlling for individual firm characteristics, on average, the study finds limited support for certification effect of sponsor-backing. The relationships between certification effect and the three variables (size, age and leverage) are further analysed in both VC and PE groups. The study found statistically significant evidence which suggests that firm age has an inverse relationship with the extent of certification effect in PE-backed IPOs.}},
author = {{Low, Jamie Wei Yee and Siow, Weijie}},
language = {{eng}},
note = {{Student Paper}},
title = {{Underpricing of Sponsor Backed and Non-Sponsor Backed IPOs in US Market}},
year = {{2018}},
}