Industry IPOs, growth opportunities, and private target acquisitions

The impact of industry IPOs on acquisitions of new ventures: An information spillovers perspective

“…Although the detailed interpretation of information generated at the industry level is difficult, IPO firms in the same industry often share some basic characteristics in common such as growth opportunities, and thus general market information can be obtained through the analysis of similar firms (e.g., Draho, 2004;Alti, 2005). It follows that acquirers could rely on information generated from industry IPOs when acquiring private targets (e.g., Aktas et al, 2016). We thus offer the following as a baseline hypothesis:…”

“…Since analysts are experts specializing in specific industries, their coverage occurs when they are optimistic about a firm's post-IPO future prospects and its industry's underlying growth opportunities (e.g., Das, Guo, and Zhang, 2006). By contrast, IPO underpricing reflects the assessments made by the capital market during the process of price discovery, so it is associated with investors' perceptions of growth opportunities of a firm and its industry (e.g., Aktas et al, 2016). Following these conceptual precedents, we therefore further decompose information spillovers from industry IPOs into three mechanisms: industry media coverage, industry analyst coverage, and industry IPO underpricing, and unpack their influences in the subsequent hypotheses.…”

“…Although prior research has focused primarily on the effects of underpricing on equity markets, the information effects of underpricing can be extended into other market contexts as well. For example, IPO firms underpricing their offerings can attract more alliance partners through greater market visibility (e.g., Pollock and Gualti, 2007), and industry IPO underpricing could facilitate acquisitions by revealing growth opportunities in the industry (e.g., Aktas et al, 2016). To the extent that industry IPO underpricing conveys information that can extend to acquirers' search and identification of private ventures, we thus expect:…”

“…For example, along with the evergrowing number of IPOs such as MuleSoft, Cloudera, and MongoDB in the open-source software market, Microsoft acquired privately-held GitHub for $7.5 billion in 2018, which would accelerate GitHub's growth and advance Microsoft's services for software developers. More broadly, research has shown that information generated from industry IPOs can trigger acquisitions involving IPO firms' private rivals (e.g., Aktas, Cousin, Ozdakak, and Zhang, 2016).…”

A kockázati tőkealapok befektetéseinek hatása a tőzsdére bevezetett portfólió cégeik felvásárlási aktivitására

“…Annak ellenére, hogy kevesebb információ áll rendelkezésre a magánvállalkozások erőforrásainak és kilátásainak minőségéről, a felvásárlók bizonyos esetekben támaszkodhatnak az ipari IPO tranzakciókból származó információs anyagokra, ezáltal megteremtve a lehetőséget, hogy potenciális akvizíciós célként már egy tőzsdére bevezetett vállalattal közvetlenül versengő magánvállalkozást válasszanak. Ezzel összefüggésben számos kutatás azt mutatja, hogy az iparági tőzsdei bevezetésekből származó információk az IPO cégek magánriválisainak történő felvásárlását válthatják ki ezáltal csökkentve a felvásárlók keresési költségeit (Aktas et al, 2016).…”