CEOs and CFOs on IPOs: The Process and Success of Going Public

Martijn J. Assem (), Nico L. Sar () and Philippe Versijp ()
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Martijn J. Assem: Vrije Universiteit Amsterdam
Nico L. Sar: Erasmus University Rotterdam
Philippe Versijp: University of Amsterdam

De Economist, 2017, vol. 165, issue 4, No 1, 410 pages

Abstract: Abstract We conducted 46 interviews with CEOs and CFOs who were closely involved in an initial public offering (IPO) in the Netherlands. Among other things, we find that pre-existing relationships are a primary consideration in the selection of the lead manager and other syndicate members. Pre-marketing feedback figures prominently throughout the pricing process. The width of the price range of book-built IPOs is especially driven by valuation uncertainty. There is evidence of strategic underpricing in anticipation of subsequent equity issues and because of management’s interest in satisfying new shareholders. Many interviewees believe that the lead manager’s business interests have had a strong influence on the allocation of shares. Managerial perceptions of IPO success are largely driven by how well the firm fared in terms of stock price performance, changes in media attention and visibility, and changes related to the retention and recruitment of staff.

Keywords: Initial public offering; Survey; Going public; IPO process; IPO success; Valuation; Lead manager; Syndicate; Pre-marketing; Book building (search for similar items in EconPapers)
JEL-codes: G30 G32 G34 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s10645-017-9302-y

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