IPO Failure Risk

Demers, Elizabeth; Joos, Philip

doi:10.2139/ssrn.656542

Cited by 53 publications

(126 citation statements)

References 64 publications

Supporting

Mentioning

112

Contrasting

Order By: Relevance

“…Firms with higher levels of debt are more likely to accept mergers or being taken over in order to avoid bankruptcy (Loderer et al., ). Consistent with these predictions, a number of studies have reported that IPO firms with higher leverage are more likely to delist (Demers and Joos, ; Bhattacharya et al., ). Finally, previous evidence suggests a negative relationship between hot market periods and IPO survival (consistent with the window of opportunity theory, Ritter () and Loughran and Ritter ().…”

Section: Methodsmentioning

confidence: 72%

Lockup Agreements and Survival of UK IPOs

Ahmad¹,

Jelic

2014

Business Fin & Account

View full text Add to dashboard Cite

This paper examines the role of lockup agreements on the survival of 580 UK Initial Public Offerings (IPOs) during the period of 1990-2011. Our accelerated failure time (AFT) survival model shows a statistically and economically significant effect of lockup length on the post-IPO survival. A 12 month increase in median lockup period increases the (median) survival time by 27%. Furthermore, the failure rates for IPOs with longer lockups are consistently lower than the failure rates for IPOs with shorter lockups regardless of delisting reasons. The results are robust to choice of different survival estimation models, heterogeneity, clustering, and alternative specification of variables. Our results highlight the importance of lockup characteristics on the subsequent survival of newly listed firms and inform recent debate regarding alleged short-termism in the UK equity market. (Paper

show abstract

Section: Methodsmentioning

confidence: 72%

Lockup Agreements and Survival of UK IPOs

Ahmad¹,

Jelic

2014

Business Fin & Account

View full text Add to dashboard Cite

show abstract

“…We seek to quantify the impact of IPO market ‘hotness’ at the time of an IPO on its subsequent survival. Based on the previous US results (Demers and Joos, 2007; and Bhattacharya et al 2010), we expect hotness to reduce survival times. We also estimate the impact on survival of domestic versus foreign incorporation of the issuing company, and we control for the impact of pre‐IPO sales of the issuing company and its insider ownership at the time of the IPO.…”

Section: Background Literature and Research Questionsmentioning

confidence: 85%

IPO Survival in a Reputational Market

Espenlaub

Khurshed

Mohamed

2012

Business Fin & Account

132

106

View full text Add to dashboard Cite

Abstract:We examine IPO survival in a 'reputational' market, the Alternative Investment Market (AIM), where principle-based regulation pivots on the role of a regulatory agent, the nominated advisor (Nomad) to the IPO company. We find that Nomad reputation has a significant impact on IPO survival. IPOs backed by reputable Nomads 'survive longer (by about two years) than those backed by other Nomads. We also find that survival rates of AIM IPOs are broadly comparable to those of North American IPOs. While these results are of obvious interest to various stakeholders of AIM firms, they also provide important lessons for market places modeled on AIM including the upper-tier of the US over-the-counter market (OTCQX), Italy's AIM Italia, and Japan's Tokyo AIM.

show abstract

“…Thus, several economists argue that new‐list US firms are more likely to offer innovative products and customer‐centric services and are less likely to compete by manufacturing commodity products more inexpensively than their predecessors (Baumol and Schramm, ; Brickley and Zimmerman, ; Payne and Frow, ; Shapiro and Varian, ). These changes are likely to increase firm risk, because they increase intangible inputs – such as research and development (R&D), information technology (IT), databases and expert human capital – with future benefits that are less certain than those from tangible assets (Apte et al , ; Comin and Philippon, ; Demers and Joos, ; Kothari et al , ).…”

Section: Introductionmentioning

confidence: 99%

Why Are Successive Cohorts of Listed Firms Persistently Riskier?

Srivastava

Tse

2016

Euro Fin Management

View full text Add to dashboard Cite

Prior studies show that the risk level of each new cohort of listed firms is higher than its predecessor's. We find that these risk differences are persistent and investigate two potential explanations: (1) Each cohort adopts and retains operating innovations that are associated with higher risks, and (2) increasing numbers of younger and less‐experienced firms are represented in each new cohort. Our results support the first explanation. Each new cohort uses riskier production technologies and operates in more competitive product markets than its predecessor.

show abstract

IPO Failure Risk

Cited by 53 publications

References 64 publications

Lockup Agreements and Survival of UK IPOs

Lockup Agreements and Survival of UK IPOs

IPO Survival in a Reputational Market

Why Are Successive Cohorts of Listed Firms Persistently Riskier?

Contact Info

Product

Resources

About