Underpricing of Venture-Backed and Non Venture-Backed IPOs: Germany's Neuer Market

Franzke, Stefanie A.

doi:10.2139/ssrn.482544

Cited by 19 publications

(11 citation statements)

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“…We include a variable VCrep, which is equal to 1 if the firm is backed by one of the top VCs and 0 otherwise, in the regression. Top VCs are those rated among the twelve best VCs as reported by Franzke (2003). The VCrep variable is not significant and our results still hold.…”

Section: Robustness Checksmentioning

confidence: 40%

Venture capital, ownership structure, accounting standards and IPO underpricing: Evidence from Germany

Elston

Yang

2010

Journal of Economics and Business

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Section: Robustness Checksmentioning

confidence: 40%

Venture capital, ownership structure, accounting standards and IPO underpricing: Evidence from Germany

Elston

Yang

2010

Journal of Economics and Business

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“…In fact, they continually bring companies to market and can thus establish a reputation, which can be exploited in the pricing of IPOs. Following these preliminary studies, others tested the certification hypothesis across markets and time periods, with mixed results (Lin and Smith 1998;Smart and Zutter 2000;Francis and Hasan 2001;Schertler 2002;Franzke 2003;Coakley, Hadass, and Wood 2009).…”

Section: Introductionmentioning

confidence: 99%

“…As some studies indicate a negative correlation between underpricing and gross spread (Habib and Ljungqvist 2001;Chahine 2008), we consider it opportune to fill this gap. Thirdly, the studies mainly focus on a specific market, such as the US (Barry et al 1990; Megginson and Weiss 1991;Lin and Smith 1998;Li and Masulis 2004), Germany (Kraus 2002;Schertler 2002;and Franzke 2003) or the UK (Levis 2007;Coakley, Hadass, and Wood 2009). As far as we know, there is no study on underpricing and the cost of going public for Italian PE-backed IPOs.…”

Section: Introductionmentioning

confidence: 99%

Underpricing, wealth loss for pre-existing shareholders and the cost of going public: the role of private equity backing in Italian IPOs

Ferretti

Meles

2011

Venture Capital

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This study analyses the role of private equity investors in solving asymmetric\ud information problems and the relationship to underpricing, wealth loss for pre-existing shareholders and the cost of going public. According to certification\ud theory, companies backed by private equity investors are expected to have lower\ud underpricing at the moment of an initial public offering, as they have fewer\ud adverse selection problems, and there is less ex-ante uncertainty. However, the\ud relationship between private equity backing and the cost of going public to issuers\ud is less clear. We use a dataset of 66 private equity-backed and 94 non-private\ud equity-backed companies that went public on the Milan Stock Exchange between\ud January 1998 and June 2008. Our findings provide evidence that out of the PE-backed firms, only those backed by private equity syndication show lower initial-day returns and indirect issuance opportunity cost, while there is no difference in\ud the certification role between bank-related and non bank-related private equity\ud investors. We also find that the benefits persist for IPOs backed by private equity\ud syndication, although to a lesser extent, even after adjusting for direct costs (gross\ud spreads) the opportunity cost of issuance

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“…First, a number of recent papers have analysed the workings of the German capital markets, for example, Bessler (1999) who found a significant equity premium and Franzke (2004), Bessler and Kurth (2007) and Bessler and Thies (2007) who investigated the performance effects of venture-backed German IPOs. This study is the first to investigate the wealth effects of private equity investor purchases of shares in German quoted companies.…”

Section: Introductionmentioning

confidence: 99%

Economic Consequences of Private Equity Investments on the German Stock Market

et al. 2009

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Underpricing of Venture-Backed and Non Venture-Backed IPOs: Germany's Neuer Market

Cited by 19 publications

References 0 publications

Venture capital, ownership structure, accounting standards and IPO underpricing: Evidence from Germany

Venture capital, ownership structure, accounting standards and IPO underpricing: Evidence from Germany

Underpricing, wealth loss for pre-existing shareholders and the cost of going public: the role of private equity backing in Italian IPOs

Economic Consequences of Private Equity Investments on the German Stock Market

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