Underpricing of private equity/venture capital backed IPOs. Do they differ from other offers?

Sieradzki, Rafał; Zasępa, Piotr

doi:10.15611/aoe.2016.1.11

Cited by 5 publications

(3 citation statements)

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“…Comparing this with the research carried out by Sieradzki and Zasępa for the period 2003-2011, the situation in the analyzed period changed radically (Sieradzki & Zasępa, 2016). The average for companies not supplied with funds for this period was 14.5%, and for companies supplied with VC/PE funds it was 11.5% with a standard deviation of 5%.…”

Section: Analysis Of the Level Of Underestimation Of Public Offers Ofsupporting

confidence: 59%

“…Among the studies on the Polish capital market, one can mention numerous studies devoted to the phenomenon of underestimation of initial public offers (see Sieradzki, 2013;Sieradzki & Zasępa, 2016) or even publications on financial forecasts. however, few authors describe the breakdown of underestimation results broken down into companies powered by private equity funds and traditional IPO transactions.…”

Section: Review Of Literature and Research On The Underestimation Of mentioning

confidence: 99%

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Trends in Underpricing of Private Equity Backed IPO at the Capital Market in Poland in the Years 2000–2018

Zasępa

2019

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<p>The global economy is distinguished by the dynamic development of financial markets and with it creating a new specific segments of the market. One of them is the market for venture capital and private equity funds, which is developing very dynamically for more than 50 years. This article aims to analyze the level of underestimation of the IPO on the Warsaw Stock Exchange companies supplied by venture capital and private equity funds. Analyzing the rates of return of 54 companies supplied with VC funds and 453 companies which do not have the support of venture capital funds in the 2000–1018 period, it should be stated that traditional companies reached the lower level of underestimation. For companies a broad market level underestimation of the IPO was 9.99% and for companies with VC/PE support – 9.12%.</p>

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Section: Analysis Of the Level Of Underestimation Of Public Offers Ofsupporting

confidence: 59%

Section: Review Of Literature and Research On The Underestimation Of mentioning

confidence: 99%

Trends in Underpricing of Private Equity Backed IPO at the Capital Market in Poland in the Years 2000–2018

Zasępa

2019

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“…This is understandable, as exiting shareholders are keen for the valuation of the shares and the offer price to be as high as possible. This is confirmed, among other things, by empirical studies on the level of underpricing of IPOs carried out as part of venture capital fund divestments, which indicate its lower level compared to other IPOs (Megginson & Weiss, 1991;Barry et al, 1990;Sieradzki & Zasępa, 2016;Rzewuska & Wrzesiński, 2016;Zasępa, 2019). Furthermore, the study confirmed that indirect costs are higher than direct costs in the whole sample.…”

Section: Resultssupporting

confidence: 64%

Costs of IPO in Poland

Podedworna-Tarnowska

2023

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Theoretical background: Entering the stock market is an important moment in the development of a company. However, whether the timing of the decision is determined by capital needs or driven by attractive market conditions is debated in literature studies. On the other hand, neither in financial theory nor in practice there is a single universal formula, the use of which would enable the determination of the most favourable capital structure for a given company, reconciling both the optimum profitability of its own capitals and a reasonable scale of risk. The decisions regarding the selection of sources of financing depend on several factors. There is no question the cost of capital is an important criterion used by companies when deciding on a financing decision. In the case of initial public offers (IPO), the total costs consist of directand indirect costs. This study fills a specific gap in the literature due to the lack of such analyses based on data coming from the Polish market especially in the context of the type of IPO and market conditions. Purpose of the article: The purpose of this article is to present the results of a study on the costs of IPO conducted on the Warsaw Stock Exchange (WSE) between 2005 and 2020. Research methods: The hypotheses were verified using the statistical analysis and an econometric linear regression. Analysis covers 249 companies debuting on the WSE between 2005 and 2020. Information on the costs of the analysed offers was obtained from the companies' current reports published after the completion of the share subscription.Pobrane z czasopisma Annales H -Oeconomia http://oeconomia.annales.umcs.pl Data: 03/04/2023 05:44:03 DOROTA PODEDWORNA-TARNOWSKA 136 Main findings: The analysis confirmed that indirect cost of the offer are higher than direct costs. Although the average total costs of the offer are highest in the case of the issuance of new shares but they are not statistically significant. Furthermore, the higher the value of the offer, the lower its total cost. The interest rates affect the total cost of IPO but the total offer costs may not be directly explained by the activity on the IPOs market. The results of the analysis indicate that the explainability of the estimated model is the biggest for the direct costs. There is also a significant difference between the years with the highest and the lowest total costs of the offer.Pobrane z czasopisma Annales H -Oeconomia http://oeconomia.annales.umcs.pl Data

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Analysis of Underestimation of Private Equity-Backed Companies on the Warsaw Stock Exchange in the Period 2007–2014

Zasępa

2018

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Underpricing of private equity/venture capital backed IPOs. Do they differ from other offers?

Cited by 5 publications

References 58 publications

Trends in Underpricing of Private Equity Backed IPO at the Capital Market in Poland in the Years 2000–2018

Trends in Underpricing of Private Equity Backed IPO at the Capital Market in Poland in the Years 2000–2018

Costs of IPO in Poland

Analysis of Underestimation of Private Equity-Backed Companies on the Warsaw Stock Exchange in the Period 2007–2014

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