Second time lucky? Withdrawn IPOs that return to the market

Craig G. Dunbar and Stephen R. Foerster

Journal of Financial Economics, 2008, vol. 87, issue 3, 610-635

Abstract: We investigate issuers withdrawing an IPO (after security regulation filings) that return later for a successful offering. Venture capital backing and reputation of the lead underwriter are key factors in predicting successful return. The possibility of returning has a significant impact on the decision to withdraw and the pricing of offerings that succeed. Our sample of returning IPOs also provides a unique setting to investigate underwriter switching after a withdrawal but before a successful IPO. We find that switching occurs in response to poor bank performance and when switching firms "graduate" to banks that have high industry market shares.

Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jfinec:v:87:y:2008:i:3:p:610-635

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