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IPO Underpricing, Wealth Losses and the Curious Role of Venture Capitalists in the Creation of Public Companies

Ljungqvist, Alexander - Department of Economics, Oxford University - 1999

Lower underpricing amongst venture-backed IPOs has been attributed to a certification role for venture capitalists. We … argue that differences in underpricing per se are uninformative and possibly misleading when not controlling for differences … in entrepreneurs` incentives to control underpricing. Using 1980s and 1990s data, we show that entrepreneursââ …

Persistent link: https://www.econbiz.de/10011146237

Underpricing and Entrepreneurial Wealth Losses in IPOs: Theory and Evidence

Habib, Michel - Department of Economics, Oxford University - 1999

We model underpricing as being endogenous to the wealth loss minimization problem encountered in a stock market … flotation. The benefits of reducing underpricing depend on the entrepreneur`s participation in the offering, via the secondary … newly issued shares. However, reducing underpricing is costly. Therefore, it is not surprising that there is positive …

Persistent link: https://www.econbiz.de/10010661346

IPO Allocations: Discriminatory or Discretionary?

Wilhelm, William; Ljungqvist, Alexander - Department of Economics, Oxford University - 2001

Using a sample of both U.S. and international IPOs we find evidence of the following: IPO allocation policies favor institutional investors both in the U.S. and worldwide. Constraints on the discretion bankers exercise in the allocation of IPO shares reduce institutional allocations. Constraints...

Persistent link: https://www.econbiz.de/10010661426

Good IPOs draw in bad: Inelastic banking capacity and hot markets

Khanna, Naveen; Noe, Thomas H. - Department of Economics, Oxford University - 2008

labor and thus its compensation. The model's conclusions are consistent with empirical findings of increased underpricing … during hot markets, positive correlation between issue volume and underpricing, negative correlation between issue volume and …, underpricing, and issue quality. Finally, the model makes sharp and so far untested predictions relating IPO market conditions …

Persistent link: https://www.econbiz.de/10011004161

Competitive IPOs

Jenkinson, Tim; Jones, Howard - Department of Economics, Oxford University - 2009

Competition between investment banks for lead underwriter mandates in IPOs is fierce, but having committed to a particular bank, the power of the issuer is greatly reduced. Although information revelation theories justify giving the underwriters influence over pricing and allocation, this...

Persistent link: https://www.econbiz.de/10011004307

Do Managers with Limited Liability Take More Risky Decisions? An Information Acquisition Model

Malcomson, James - Department of Economics, Oxford University - 2009

Risk-neutral individuals take more risky decisions when they have limited liability. Risk-neutral managers may not …

Persistent link: https://www.econbiz.de/10008459580