Uncertainty and IPO initial returns: Evidence from the Tone Analysis of China’s IPO Prospectuses

Yan, Yunrong; Xiong, Xiong; Meng, J. Ginger; Zou, Gaofeng

doi:10.1016/j.pacfin.2018.10.004

Cited by 31 publications

(19 citation statements)

References 30 publications

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“…the company's initial return. This can be explained as a new company, IPO company shares are at risk, the source of information only comes from the company's fundamental information not the technical information (Yan et al, 2018). This result is different from the Wasiuzzaman et al (2018) research findings which in the research model found investment risk as the only type of risk that significantly affected company returns.…”

Section: Variablescontrasting

confidence: 59%

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Disclosure of Risk Factors on Prospectus and Initial Public Offerings (IPO) Performance: Evidence from Indonesia

Kuswanto¹

2020

Jurnal Ilmiah Akuntansi dan Bisnis

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The purpose of this study is to investigate how risk information disclosed in prospectus influences the initial returns of initial public offerings (IPOs) in Indonesia. This study collected 62 sample IPOs offered in the Indonesian Stock Exchange from 2017–2018. Ordinary least squares was performed to test the association between risk disclosure and initial returns. Results indicate that prospectus provides risk information associated with initial returns. Both qualitative and quantitative dimensions have a significant negative impact on the initial returns. It can be concluded that risk information has an important role in the underpricing phenomenon. The study has extended the available literature by investigating risk disclosure from a dual perspective. Moreover, qualitative and quantitative assessments both have a direct impact on the initial returns and must be considered in investment decision making. Keywords: Risk, IPO, underpricing, initial returns

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Section: Variablescontrasting

confidence: 59%

“…On the other hand, a negative value indicates that the offer price of shares is too expensive (overpriced). This measurement is commonly used in various studies such as (Brobert, 2016); (Murugesu & Santhapparaj, 2010); (Yan, et al, 2018); and (Wasiuzzaman et al, 2018).…”

Section: Methodsmentioning

confidence: 99%

Disclosure of Risk Factors on Prospectus and Initial Public Offerings (IPO) Performance: Evidence from Indonesia

Kuswanto¹

2020

Jurnal Ilmiah Akuntansi dan Bisnis

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“…Almost all research had a similar conclusion; IPO stocks were undervalued (Andani & Taqwa, 2020;Oktavia, 2019;Rahmanto & Suriawinata, 2019). However, underpricing studies are generally related to company performance (Brycz et al, 2018;Oktavia, 2019), abnormal return (Arora & Singh, 2020;Aslam, 2017), or their relation to the company's prospectus (Kuswanto, 2020;Premti & Smith, 2020;Yan et al, 2019). There has been limited studies on Indonesia that links the phenomenon of underpricing with the Coronavirus Disease 2019 (COVID-19) pandemic situation.…”

Section: Introductionmentioning

confidence: 92%

“…Risk management is an important concern of every investor. According to Yan et al (2019), business risk consists of three, namely business risk, financial risk, and market risk. Kuswanto (2020) proves that the risks of IPO companies in the prospectus can reduce the effect of underpricing.…”

Section: Figure 1 Number Of Underpricing Stock During the Research Periodmentioning

confidence: 99%

“…This phenomenon is commonly and empirically known as underpricing. The existence of underpricing phenomenon had been widely found by researchers across the globe (Arora & Singh, 2020;Chen et al, 2010;Jogiyanto, 2017;Mulchandani & Gerelani, 2018;Yan et al, 2019). This phenomenon shows IPO stock price is undervalued (in other words, cheap), and many investors were eyeing it (Juliana & Sumani, 2019).…”

Section: Introductionmentioning

confidence: 96%

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IPO Stock Performance amidst the COVID-19 Pandemic: Has It been Undervalued?

Kuswanto¹

2021

Journal of Accounting and Business Dynamics

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The purpose of this study is to examine the underpricing phenomenon from IPO firms listed in Indonesia Stock Exchange during the COVID-19 pandemic. Using purposive sampling method, 34 IPO firms after the announcement of pandemic COVID-19 were selected as research samples. The IPO stock closing prices and returns on days 1, 5, 10, 15, and 20 were analyzed using paired sample t-test. The findings show underpricing phenomenon still occurred during the pandemic period. However, the underpricing only documented statistically significant on the T1 of the trading day. After the first day of trading, the stock’s returns consistently declined and were proved statistically insignificant at T5, T10, T15, and T20.The purpose of this study is to examine the underpricing phenomenon from IPO firms listed in Indonesia Stock Exchange during the COVID-19 pandemic. Using purposive sampling method, 34 IPO firms after the announcement of pandemic COVID-19 were selected as research samples. The IPO stock closing prices and returns on days 1, 5, 10, 15, and 20 were analyzed using paired sample t-test. The findings show underpricing phenomenon still occurred during the pandemic period. However, the underpricing only documented statistically significant on the T1 of the trading day. After the first day of trading, the stock’s returns consistently declined and were proved statistically insignificant at T5, T10, T15, and T20.

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A cross‐language analysis of disclosure properties: Evidence from Hong Kong

Do,

Hu,

Nabar

2024

J Corp Accounting Finance

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Using the setting of Hong Kong, we examine how the linguistic properties of financial disclosure differ across languages. We exploit the requirement that firms listed on the Hong Kong Stock Exchange publish annual reports in two languages, English and Chinese. We find that for the same firm, English reports are more positive, convey more uncertainty, and focus more on the past and present and less on the future, than Chinese reports. We also find that English (Chinese) reports are more likely to manage their tone by varying the frequency of positive (negative) words. Finally, the stock market only reacts positively to tone management in Chinese reports. Overall, the results suggest that there are significant and fundamental differences in the linguistic properties of English and Chinese reports and that such differences have material implications for how investors perceive the reports.

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Uncertainty and IPO initial returns: Evidence from the Tone Analysis of China’s IPO Prospectuses

Cited by 31 publications

References 30 publications

Disclosure of Risk Factors on Prospectus and Initial Public Offerings (IPO) Performance: Evidence from Indonesia

Disclosure of Risk Factors on Prospectus and Initial Public Offerings (IPO) Performance: Evidence from Indonesia

IPO Stock Performance amidst the COVID-19 Pandemic: Has It been Undervalued?

A cross‐language analysis of disclosure properties: Evidence from Hong Kong

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