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A comparative study of the valuation of FinTech and Dot-Com companies

Izairi, Kaltrina LU and Amornthanomchoke, Thanaporn LU (2019) NEKN02 20191
Department of Economics
Abstract
This master thesis examines the valuation of FinTech and Dot-Com companies by looking at the underpricing level of initial public offerings (IPOs) and the abnormal returns during the period surrounding the announcement date of merger and acquisitions (M&As). The sample consists of 234 IPO’s observations from 1995-2019 and 58 M&A’s deals from 2000-2019. The results suggest that the underpricing level of FinTech IPOs is less than the underpricing level of Dot-Com IPOs. As for M&As, univariate testing shows no difference between cumulative abnormal returns (CAR) of FinTech and Dot-Com companies. However, the regression results show higher CAR during the Dot-Com bubble burst (2000). Other variables affecting underpricing level (size, age,... (More)
This master thesis examines the valuation of FinTech and Dot-Com companies by looking at the underpricing level of initial public offerings (IPOs) and the abnormal returns during the period surrounding the announcement date of merger and acquisitions (M&As). The sample consists of 234 IPO’s observations from 1995-2019 and 58 M&A’s deals from 2000-2019. The results suggest that the underpricing level of FinTech IPOs is less than the underpricing level of Dot-Com IPOs. As for M&As, univariate testing shows no difference between cumulative abnormal returns (CAR) of FinTech and Dot-Com companies. However, the regression results show higher CAR during the Dot-Com bubble burst (2000). Other variables affecting underpricing level (size, age, expenses, US listed and underwriter reputation) and CAR (size, method of payment, industry, leverage, and advisor ranking) are also examined further in this thesis. For IPOs underpricing, the results show that firm age has a negative relationship with the underpricing level, in contrast with market capitalization. For M&As the method of payment has a negative relationship with the CAR. (Less)
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author
Izairi, Kaltrina LU and Amornthanomchoke, Thanaporn LU
supervisor
organization
course
NEKN02 20191
year
type
H1 - Master's Degree (One Year)
subject
keywords
Initial Public Offering, Merger and Acquisition, FinTech, Dot-Com, Underpricing, Abnormal Return
language
English
id
8982060
date added to LUP
2019-08-08 08:19:30
date last changed
2019-08-08 08:19:30
@misc{8982060,
  abstract     = {{This master thesis examines the valuation of FinTech and Dot-Com companies by looking at the underpricing level of initial public offerings (IPOs) and the abnormal returns during the period surrounding the announcement date of merger and acquisitions (M&As). The sample consists of 234 IPO’s observations from 1995-2019 and 58 M&A’s deals from 2000-2019. The results suggest that the underpricing level of FinTech IPOs is less than the underpricing level of Dot-Com IPOs. As for M&As, univariate testing shows no difference between cumulative abnormal returns (CAR) of FinTech and Dot-Com companies. However, the regression results show higher CAR during the Dot-Com bubble burst (2000). Other variables affecting underpricing level (size, age, expenses, US listed and underwriter reputation) and CAR (size, method of payment, industry, leverage, and advisor ranking) are also examined further in this thesis. For IPOs underpricing, the results show that firm age has a negative relationship with the underpricing level, in contrast with market capitalization. For M&As the method of payment has a negative relationship with the CAR.}},
  author       = {{Izairi, Kaltrina and Amornthanomchoke, Thanaporn}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{A comparative study of the valuation of FinTech and Dot-Com companies}},
  year         = {{2019}},
}