Unveiling the Pandemic Paradox
(2023) BUSN79 20231Department of Business Administration
- Abstract
- Purpose: This paper aimed to present new insights into how Covid-19 has affected the European IPO market both in the short and long-term and how underlying factors can explain this phenomenon. Additionally, the paper's findings provide valuable insights into the effects of the pandemic on financial markets. It can help investors and policymakers to better
understand the risks and opportunities associated with going public during uncertain times.
Methodology: To test the hypothesis this study employed an Ordinary Least Squares (OLS) regression model controlling for industry and country effects and utilizing a Covid-19 dummy variable as the main explanatory variable. The findings are then examined and analyzed in relation to existing... (More) - Purpose: This paper aimed to present new insights into how Covid-19 has affected the European IPO market both in the short and long-term and how underlying factors can explain this phenomenon. Additionally, the paper's findings provide valuable insights into the effects of the pandemic on financial markets. It can help investors and policymakers to better
understand the risks and opportunities associated with going public during uncertain times.
Methodology: To test the hypothesis this study employed an Ordinary Least Squares (OLS) regression model controlling for industry and country effects and utilizing a Covid-19 dummy variable as the main explanatory variable. The findings are then examined and analyzed in relation to existing theories.
Theoretical perspectives: This study used theoretical perspectives such as information asymmetry, behavioral explanations, and investor behavior during the Covid-19 pandemic to develop the hypothesis and provide context for the findings.
Empirical foundation: The final sample consists of 1072 Western European IPOs issued between February 19, 2017, to February 18, 2019, and February 19, 2020, to February 18, 2022. The data was mainly retrieved from Bloomberg.
Conclusions: This study finds statistically significant evidence that companies that went public during Covid-19 were more underpriced and had worse one-year aftermarket performance compared to those that went public before Covid-19. The change in performance is attributed to increased information asymmetry and changes in investor behavior. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9130523
- author
- Stenholtz, Arvid LU and Gustavsson, Jimmy LU
- supervisor
- organization
- alternative title
- Evaluating the Impact of Covid-19 on IPO Underpricing and Post-IPO Performance in Europe
- course
- BUSN79 20231
- year
- 2023
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- Initial Public Offering, Covid-19, Fear of Missing Out, Underpricing and Long-term Performance
- language
- English
- id
- 9130523
- date added to LUP
- 2023-09-12 15:36:01
- date last changed
- 2023-09-12 15:36:01
@misc{9130523,
abstract = {{Purpose: This paper aimed to present new insights into how Covid-19 has affected the European IPO market both in the short and long-term and how underlying factors can explain this phenomenon. Additionally, the paper's findings provide valuable insights into the effects of the pandemic on financial markets. It can help investors and policymakers to better
understand the risks and opportunities associated with going public during uncertain times.
Methodology: To test the hypothesis this study employed an Ordinary Least Squares (OLS) regression model controlling for industry and country effects and utilizing a Covid-19 dummy variable as the main explanatory variable. The findings are then examined and analyzed in relation to existing theories.
Theoretical perspectives: This study used theoretical perspectives such as information asymmetry, behavioral explanations, and investor behavior during the Covid-19 pandemic to develop the hypothesis and provide context for the findings.
Empirical foundation: The final sample consists of 1072 Western European IPOs issued between February 19, 2017, to February 18, 2019, and February 19, 2020, to February 18, 2022. The data was mainly retrieved from Bloomberg.
Conclusions: This study finds statistically significant evidence that companies that went public during Covid-19 were more underpriced and had worse one-year aftermarket performance compared to those that went public before Covid-19. The change in performance is attributed to increased information asymmetry and changes in investor behavior.}},
author = {{Stenholtz, Arvid and Gustavsson, Jimmy}},
language = {{eng}},
note = {{Student Paper}},
title = {{Unveiling the Pandemic Paradox}},
year = {{2023}},
}