Birds of a feather flock together: A study of new shareholders and Swedish IPOs

Abrahamson, Martin

doi:10.1016/j.jbef.2018.01.002

Cited by 1 publication

(2 citation statements)

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“…Grullon et al (2004) use marketing expenses to measure possible investor attention to study how the latter affects both the breadth of ownership and the liquidity of firms. Abrahamson (2018Abrahamson ( , 2020 use breadth of ownership to analyze institutional investors' ability to invest in IPOs with high IR. In this present paper, breadth of ownership is used mainly as an indicator of investor attention.…”

Section: Hypothesesmentioning

confidence: 99%

“…This study uses hand-collected data on IPOs and an ownership registry containing the stock holdings for all publicly listed firms in Sweden. Hence, this study adds to previous work on IPO pricing and ownership structure (of, e.g., Fernando et al (2004); Abrahamson (2018Abrahamson ( , 2020; Sandhu and Guhathakurta (2020); and Kao et al (2022)), using a sample containing not only the main market but also two smaller multilateral trading facilities (MTFs). This study also adds to that study by using two alternative definitions of breadth of ownership, something mentioned as a possible reason for deviating results in previous studies.…”

Section: Introductionmentioning

confidence: 99%

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Offer Price and Post-IPO Ownership Structure

Abrahamson

2024

JRFM

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In an initial public offering (IPO) the firm can set the offer price of its shares, based on the valuation of the firm, by changing the number of shares. This study uses stock ownership records and hand-collected IPO data to analyze the offer prices, the underpricing of IPO shares (measured as the initial return, IR) and the relationship with the post-IPO ownership structure. Specifically, the paper focuses on individual IPO investors. The results show that for the lowest priced IPOs the IR is significantly higher priced IPOs. Furthermore, for the low-priced IPOs, there is a negative relationship between offer price and breadth of ownership. This implies that stocks with a low price can attract more investors than stocks with higher offer prices. However, for high-priced IPOs the relationship is positive, suggesting that also the IPOs with highest price attract more investors. Overall, this study shows that the offer price of an IPO firm may have a moderate effect on its post-IPO ownership structure.

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Section: Hypothesesmentioning

confidence: 99%