Value Gains on Flotation and IPO Underpricing

PC Hill; N Wilson

doi:10.1111/j.1468-5957.2006.00643.x

Value Gains on Flotation and IPO Underpricing

PC Hill, N Wilson

School of Accounting and Finance - Business School

Research output: Contribution to journal › Article (Academic Journal) › peer-review

10 Citations (Scopus)

Abstract

Utilising a unique dataset of 502 UK IPOs we undertake an empirical analysis of the relationship between underpricing and value gains on flotation. We find support for our hypothesis that IPO underpricing is related to the extent of anticipated value gains on the private to public transition. We analyse alternative driving mechanisms behind this relationship, and our results suggest that the underpricing of IPOs is driven by both underwriters and issuing company directors, each of whom derive net benefits over the longer term from underpricing at the IPO.

Translated title of the contribution	Value Gains on Flotation and IPO Underpricing
Original language	English
Pages (from-to)	1435 - 1459
Number of pages	25
Journal	Journal of Business Finance and Accounting
Volume	33 (9-10)
DOIs	https://doi.org/10.1111/j.1468-5957.2006.00643.x
Publication status	Published - Nov 2006

Bibliographical note

Publisher: Blackwell

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10.1111/j.1468-5957.2006.00643.x

http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-5957.2006.00643.x

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Cite this

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title = "Value Gains on Flotation and IPO Underpricing",

abstract = "Utilising a unique dataset of 502 UK IPOs we undertake an empirical analysis of the relationship between underpricing and value gains on flotation. We find support for our hypothesis that IPO underpricing is related to the extent of anticipated value gains on the private to public transition. We analyse alternative driving mechanisms behind this relationship, and our results suggest that the underpricing of IPOs is driven by both underwriters and issuing company directors, each of whom derive net benefits over the longer term from underpricing at the IPO.",

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AU - Wilson, N

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PY - 2006/11

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N2 - Utilising a unique dataset of 502 UK IPOs we undertake an empirical analysis of the relationship between underpricing and value gains on flotation. We find support for our hypothesis that IPO underpricing is related to the extent of anticipated value gains on the private to public transition. We analyse alternative driving mechanisms behind this relationship, and our results suggest that the underpricing of IPOs is driven by both underwriters and issuing company directors, each of whom derive net benefits over the longer term from underpricing at the IPO.

AB - Utilising a unique dataset of 502 UK IPOs we undertake an empirical analysis of the relationship between underpricing and value gains on flotation. We find support for our hypothesis that IPO underpricing is related to the extent of anticipated value gains on the private to public transition. We analyse alternative driving mechanisms behind this relationship, and our results suggest that the underpricing of IPOs is driven by both underwriters and issuing company directors, each of whom derive net benefits over the longer term from underpricing at the IPO.

U2 - 10.1111/j.1468-5957.2006.00643.x

DO - 10.1111/j.1468-5957.2006.00643.x

M3 - Article (Academic Journal)

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JO - Journal of Business Finance and Accounting

JF - Journal of Business Finance and Accounting

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