...The conventional underwriting of initial public offerings typically involves investment ban... that investment bankers stake their reputation to certify that insiders fully disclose their priv... (1990) argue that prestigious underwriters screen new issues and select the less risky firms ...
We examine the individual and joint relation of discretionary accounting accruals, underwriter reputation, and venture capital backing with the long-run performance of initial public offerings (IPOs). We find that although correlated to some extent, these variables do not manifest the same underlying phenomena in their relation to IPOs' performance. The confluence of the variables is more important than using any one of them individually to identify IPOs that exhibit abnormal long-run stock returns. The combination of their negative aspects helps identify extreme underperformers. We also identify a set of winner IPOs by combining the positive aspects of the three variables.
...Overconfidence (or more mundane public choice reasons) may cause regulators to ignore the... on the identity of the managing underwriters, applying a heuristic that well-known underwriterss often equate to lower risk offerings. (54) Even well-known underwriters, of course, can... the engagement of the staff in the initial decision. Moreover, the thoroughness of review by ... only in companies with known reputations that trade on nationally recognized exchanges (suc...
The OCC, Board, FDIC, and SEC (individually, an ``Agency,'' and collectively, ``the Agencies'') are requesting comment on a proposed rule that would implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (``Dodd-Frank Act'') which contains certain prohibitions and restrictions on the ability of a banking entity and nonbank financial company supervised by the Board to engage in proprietary trading and have certain interests in, or relationships with, a hedge fund or private equity fund.
... ``Open Docket Folder'' to submit or view public comments and to view supporting and related materi... and providing the fund with sufficient initial equity for investment to permit the fund to attrac... the banking entity is acting as an underwriter. This prong is intended to give effect to the esse... holders, and others in connection with offerings of securities under the Exchange Act.\134\ The Age... in order to preserve the entity's reputation.\254\ Thus, under Sec. --.11(f) of the proposed r...
The main goal of this study is to analyze a sample of self-underwritten Initial Public Offerings (IPOs) where the going public process is conducted without the participation of any investment bank or underwriter at all. We test the hypothesis that the major incentive to self-underwrite is to maximize the proceeds from the IPO.The firms in this study are considered self-underwritten if and only if they explicitly describe their own IPO as such in the registration statement and the prospectus. This definition is completely new, since most previous academic papers have considered as those where the issuer is an investment bank that also participates in its own IPO. The main conclusion of this study is that there are no significant differences on the level of underpri...
... should damage investment bank reputation since future issuers are less likely to use invest...
...Distributor, Inc., the primary underwriter for the Columbia family. of mutual funds, responsi... for answering inquiries from the investing public and. other entities seeking additional information...Fund, who had initially approved the arrangement, communicated to. both Ta...new offerings and the Exchange Act with post-distribution tradin...investors for their "reputation, integrity, independence, and. expertise." Dolphi...
A majority of initial public offerings (IPOs) securities fraud class actions are frivolous suits driven more by plaintiff attorneys' fee and fixed cost incentives than by actual merit. A sample of 3519 IPOs indicates most were not the targets of litigation, but the suits that did result were focused on certain industries and higher quality underwriters. The sample's results shed empirical light on the enforcement and the strike-suit theories of securities fraud class actions.
..., litigation, distraction, and reputation costs(62) from answering the plaintiffs, complaint...
According to most research, firms benefit from being listed on the New York Stock Exchange (NYSE). Nevertheless, 224 of 640 firms that went public from 1993 through 2000 and were eligible for a NYSE listing chose to list their stock on Nasdaq. We hypothesize that this choice may be related to Securities and Exchange Commission (SEC) Rule 144. The rule regulates the sale of restricted stock by limiting the amount of unregistered stock that can be sold by an individual. We investigate the determinants of post-IPO sales of restricted stock, examine IPO firms' listing choices, and find evidence consistent with firms selecting Nasdaq to reduce the effect of the limits on selling restricted stock imposed by the SEC's Rule 144. Venture capitalists play an important role in this listing decisio...
... listing on the NYSE at the time of their initial public offering (IPO), decided to trade on Nasdaq ... decisions and control for firm size, underwriter quality, and membership in a technology industry, ... closed-end funds, REITS, ADRS, rights offerings, privatizations, spin-offs, and issues with an off... document the importance of underwriter reputation as a factor in IPO success. We measure underwriter...
The primary subject matter of this case concerns the international public birth and development of a pioneering Internet firm with a short existence before its slow but positive growth in a market dominated by large multinational firms which also made it the prime target for takeover and purchase. The issue of valuation of the firm's initial public offering shares is the central focus for the case evaluator and student. How should the stock market value a firm whose major competitors are virtual giants in the Internet world and specifically, the multinational dot.com world? The case has a difficulty level of five, appropriate for first year graduate level. The case has both current and historical applicability for MBA students concentrating in corporate finance, international financial ...
...are the underwriters for the IPO of Novaco Corporation, who want to iss... risk that is most common with initial offerings - either underpricing or over- pricing the issue. ... needed capital is undermined and the reputation of the underwriter is damaged. On the other hand, ...
This article tests the hypothesis that the financial characteristics of the issuing firm, along with the availability of alternative sources of financing, are important determinants of the level of underpricing. While risk and its relationship to underpricing have been examined in previous studies, liquidity risk is unique because of its special implications for a firm's bargaining position with the underwriter. Consistent with my hypothesis, firms with greater liquidity concerns at the IPO experience greater underpricing. On the other hand, firms with higher levels of venture capital funding and/or debt financing are more fully priced.
... studies document persistently positive initial-day returns, or underpricing, of Initial Public Of..., underwriter prestige, and auditor reputation. In addition, previous research suggests that the ... the rationing of oversubscribed offerings. In perhaps the oldest and most straightforward of...
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