Motives and effects of the initial public offerings on the Warsaw Stock Exchange

Tomasz Sosnowski ()
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Tomasz Sosnowski: University of Lodz, Poland

No 46/2014, Working Papers from Institute of Economic Research

Abstract: This paper empirically investigates the links between the motives for going public and changes in the market value and efficiency of new stock companies. Using a sample of 200 firms from Warsaw Stock Exchange between 2005 and 2012 I find that the principal purpose of initial public offering is raising additional capital by the company but divestment grounds of initial shareholders are also important. I find evidence that the sale of secondary shares in the initial public offering may be seen as a negative signal at aftermarket performance of the firm. The data reveal that the most adverse long-term changes in the market value and business efficiency are observed for those companies, where in the initial public offering both primary and secondary shares were sold.

Keywords: initial public offering; Primary shares; Secondary shares; Motives for going public (search for similar items in EconPapers)
JEL-codes: G23 G32 (search for similar items in EconPapers)
Date: 2014-12, Revised 2014-12
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Persistent link: https://EconPapers.repec.org/RePEc:pes:wpaper:2014:no46

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