The Role of Cornerstone Investors in IPOs: A Study on Long-run Performance and Survival
(2024) NEKN02 20241Department of Economics
- Abstract
- The primary goal of this thesis is to understand the role of cornerstone investors in the long-run performance and survival of IPO firms issued during 2014-2023 in the Swedish market. While the phenomenon of cornerstone investors is relatively new, the trend has been increasing exponentially globally. We use several dimensions of cornerstone metrics to explain the dynamics of IPO performance and survival during the study period. We find that the presence of cornerstone investors prolongs the positive aftermarket returns up to 6 months and exhibits increased average aftermarket returns, when compared to unbacked IPOs. The paper shows significant evidence for the positive impact of cornerstone investors on long-run performance from 6-month... (More)
- The primary goal of this thesis is to understand the role of cornerstone investors in the long-run performance and survival of IPO firms issued during 2014-2023 in the Swedish market. While the phenomenon of cornerstone investors is relatively new, the trend has been increasing exponentially globally. We use several dimensions of cornerstone metrics to explain the dynamics of IPO performance and survival during the study period. We find that the presence of cornerstone investors prolongs the positive aftermarket returns up to 6 months and exhibits increased average aftermarket returns, when compared to unbacked IPOs. The paper shows significant evidence for the positive impact of cornerstone investors on long-run performance from 6-month to 24-month mark. However, contrasting results are seen in the survival of an IPO firm. Another significant contribution of this paper is in determining the quality of the cornerstone investors and how they impact the metrics. We find that IPOs with a higher proportion of cornerstone investors with board independence among the set of investors experience a higher survival rate and a positive impact on the aftermarket return at the 36-month mark. (Less)
- Popular Abstract
- The primary goal of this thesis is to understand the role of cornerstone investors in the long-run performance and survival of IPO firms issued during 2014-2023 in the Swedish market. While the phenomenon of cornerstone investors is relatively new, the trend has been increasing exponentially globally. We use several dimensions of cornerstone metrics to explain the dynamics of IPO performance and survival during the study period. We find that the presence of cornerstone investors prolongs the positive aftermarket returns up to 6 months and exhibits increased average aftermarket returns, when compared to unbacked IPOs. The paper shows significant evidence for the positive impact of cornerstone investors on long-run performance from 6-month... (More)
- The primary goal of this thesis is to understand the role of cornerstone investors in the long-run performance and survival of IPO firms issued during 2014-2023 in the Swedish market. While the phenomenon of cornerstone investors is relatively new, the trend has been increasing exponentially globally. We use several dimensions of cornerstone metrics to explain the dynamics of IPO performance and survival during the study period. We find that the presence of cornerstone investors prolongs the positive aftermarket returns up to 6 months and exhibits increased average aftermarket returns, when compared to unbacked IPOs. The paper shows significant evidence for the positive impact of cornerstone investors on long-run performance from 6-month to 24-month mark. However, contrasting results are seen in the survival of an IPO firm. Another significant contribution of this paper is in determining the quality of the cornerstone investors and how they impact the metrics. We find that IPOs with a higher proportion of cornerstone investors with board independence among the set of investors experience a higher survival rate and a positive impact on the aftermarket return at the 36-month mark. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/9157635
- author
- Mathew, Merriea LU
- supervisor
-
- Marco Bianco LU
- organization
- course
- NEKN02 20241
- year
- 2024
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- IPO, Cornerstone Investors, Long-run performance, Survival
- language
- English
- id
- 9157635
- date added to LUP
- 2024-08-12 15:58:54
- date last changed
- 2024-08-12 15:58:54
@misc{9157635,
abstract = {{The primary goal of this thesis is to understand the role of cornerstone investors in the long-run performance and survival of IPO firms issued during 2014-2023 in the Swedish market. While the phenomenon of cornerstone investors is relatively new, the trend has been increasing exponentially globally. We use several dimensions of cornerstone metrics to explain the dynamics of IPO performance and survival during the study period. We find that the presence of cornerstone investors prolongs the positive aftermarket returns up to 6 months and exhibits increased average aftermarket returns, when compared to unbacked IPOs. The paper shows significant evidence for the positive impact of cornerstone investors on long-run performance from 6-month to 24-month mark. However, contrasting results are seen in the survival of an IPO firm. Another significant contribution of this paper is in determining the quality of the cornerstone investors and how they impact the metrics. We find that IPOs with a higher proportion of cornerstone investors with board independence among the set of investors experience a higher survival rate and a positive impact on the aftermarket return at the 36-month mark.}},
author = {{Mathew, Merriea}},
language = {{eng}},
note = {{Student Paper}},
title = {{The Role of Cornerstone Investors in IPOs: A Study on Long-run Performance and Survival}},
year = {{2024}},
}