Factors Influencing IPO Decisions. Do Corporate Managers Use Market and Corporate Timing? A Survey

Abstract

This paper explores the motives for Initial Public Offerings (IPOs); that is, whether market mispricing or the behavioral inclinations of investors and analysts impact corporate decisions about rising equity, with a particular focus on market and corporate timing practices of managers going public. To do so, an anonymous survey was conducted of 166 managers of firms that recently went public at the Warsaw Stock Exchange in Poland (being the second most active IPO market in Europe, after London). The resulting data reveals that managers attempt to time bullish markets and good historical corporate financial results.

Bezpośrednie koszty emisji akcji w pierwszej ofercie publicznej na GPW w Warszawie (Direct costs of share issuance in IPO on the Warsaw Stock Exchange)

“…Motywy tej decyzji stanowią przedmiot licznych badań empirycznych [Pagano i in. 1998;Mayur, Kumar 2013;Szyszka 2014], gdzie wymienia się możliwość pozyskania przez spółkę kapitału czy też okazję na dokonanie dezinwestycji przez dotychczasowych akcjonariuszy. Ważnym argumentem jest także poprawa wizerunku i zwiększenie wiarygodności podmiotu, którego akcje są przedmiotem obrotu rynkowego.…”

Political Uncertainty and Initial Public Offerings: A Literature Review

“…The benefits of listing (higher visibility and recognition, higher liquidity, better access to other sources of financing) should be more than the costs involved (Carbone et al 2022). The other factors that may affect the decision are periods of hot or cold markets (Altı 2005) and investor sentiments and their behavior (Szyszka 2014). Government policy changes and political uncertainty also influence IPO decisions.…”

IPO costs on the Polish capital market

“…While the benefits are clear, the IPO decision itself is always costly, financially and organisationally (Helbing et al, 2019). The motives behind the decision to list are the subject of numerous scholarly research studies (Pagano et all, 1998, Szyszka 2014. For the issuer, aside from benefits arising from being a public company, conducting an Initial Public Offering through a public subscription is tied to the necessity of pay for certain expenses.…”