Messages from Market to Management: The Case of IPOs

Bommel, Jos van

doi:10.2139/ssrn.87

Cited by 9 publications

(6 citation statements)

References 60 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Stoughton, Wong, and Zechner (2001) show that stock price information generated during an IPO can help consumers to discern the quality of the firm's product. Van Bommel (2002) presents a model where the issuer sets a low IPO price to induce information production by investors and then uses the feedback from the market in its investment decisions.…”

Section: Introductionmentioning

confidence: 99%

Market Feedback and Equity Issuance: Evidence from Repeat Equity Issues

Hovakimian

Hutton²

2010

J. Financ. Quant. Anal.

View full text Add to dashboard Cite

Higher first-year post-issue returns are associated with a significantly higher probability of follow-on equity issuance over the next 5 years. This result holds when we control for pre-issue returns and other factors known to affect the probability of equity issuance. The result is most consistent with the market feedback hypothesis that a high post-issue return encourages managers to increase the firm’s investment because it implies that, in the market’s view, the marginal return to the project is high.

show abstract

Section: Introductionmentioning

confidence: 99%

Market Feedback and Equity Issuance: Evidence from Repeat Equity Issues

Hovakimian

Hutton²

2010

J. Financ. Quant. Anal.

View full text Add to dashboard Cite

show abstract

“…An IPO may result in optimal monitoring by shareholders or may allow improved incentive contracts between the firm and the manager, and so on. For example, work by Holmstrom and Tirole (1993), Maug (1997), Bolton and von Thadden (1998), Röell (1998), andvan Bommel (2000) falls into this literature category.…”

Section: Introductionmentioning

confidence: 99%

IPOs and Product Quality

Stoughton¹,

Wong²,

Zechner³

2001

J BUS

172

View full text Add to dashboard Cite

“…2 2 This idea is scattered in the literature. Rock (1986), Jegadeesh et al (1993), and Bommel (1997) claim that the capital market can be better informed about the quality of an IPO company than the company itself. Giammarino et al (2004) make a similar claim about SEOs.…”

mentioning

confidence: 99%

Do Insiders Learn from Outsiders? Evidence from Mergers and Acquisitions

Luo

2005

The Journal of Finance

551

131

View full text Add to dashboard Cite

I find that the market reaction to a merger and acquisition (M&A) announcement predicts whether the companies later consummate the deal. The relation cannot be explained by the market's anticipation of the closing decision or its perception of the deal quality at the announcement. Merging companies appear to extract information from the market reaction and later consider it in closing the deal. Furthermore, the relation varies with deal characteristics, suggesting that companies seem to have a higher incentive to learn from the market when canceling the announced deal is easier or when the market has more information that the companies do not know. Copyright 2005 by The American Finance Association.

show abstract

Messages from Market to Management: The Case of IPOs

Cited by 9 publications

References 60 publications

Market Feedback and Equity Issuance: Evidence from Repeat Equity Issues

Market Feedback and Equity Issuance: Evidence from Repeat Equity Issues

IPOs and Product Quality

Do Insiders Learn from Outsiders? Evidence from Mergers and Acquisitions

Contact Info

Product

Resources

About