Underpricing versus Gross Spread: New Evidences on the Effect of Sold Shares at the Time of IPOs

Chahine, Salim

doi:10.2139/ssrn.498482

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Data Sources Sample Selection and Methodology1

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2004

2014

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Cited by 7 publications

(2 citation statements)

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“…CHAHINE (2003) indicates that contrary to results in HABIB and LJUNGQVIST (2001), more prestigious underwriters charge lower direct costs, but manage more underpriced issues in the French markets. [5] As both the gross spread and the underpricing depend on the number of primary and secondary sold shares, the choice of the underwriter should thus depend on both these variables.…”

Section: Endnotesmentioning

confidence: 85%

Corporate governance and firm value for small and medium sized IPOs

Chahine

2004

Fin Mkts Portfolio Mgmt

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Section: Endnotesmentioning

confidence: 85%

Corporate governance and firm value for small and medium sized IPOs

Chahine

2004

Fin Mkts Portfolio Mgmt

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“…In line with the prior IPO literature, we control for the following variables. The Direct IPO cost is the direct IPO cost, which is equal to the sum of management, selling and underwriting fees, expressed as a fraction of the gross proceeds (Chahine, 2008). Firm size is measured by the firm's market capitalization (in USD Million) based on the offer price to control for ex ante uncertainty (Booth and Smith, 1986) which is likely to be inversely related to firm size.…”

Section: Data Sources Sample Selection and Methodologymentioning

confidence: 99%

On the Publicity of Two‐Stage Spin‐Offs and Equity Carve‐Outs

Chahine

Goergen

2011

The Financial Review

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We investigate the effect of pre-offer publicity on ownership, pricing, and aftermarket performance for equity carve-outs (ECOs) and two-stage spin-offs (COSOs). Contrary to ECOs, for COSOs the parent firm's shareholders end up with free shares in the subsidiary. As the value of large share blocks is likely to be negatively affected by the emergence of new blocks after the divestiture, we hypothesize that parent firms undertaking COSOs may conduct more pre-offer publicity to attract more retail investors, keeping outside ownership diffuse and inflating aftermarket performance until the distribution of the free shares. We find empirical support for our hypotheses.

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