Same bed different dream composition of IPO shares and withdrawal decisions in weak market conditions

Pengda Fan and Kazuo Yamada ()
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Pengda Fan: Ritsumeikan Asia Pacific University

Small Business Economics, 2020, vol. 55, issue 4, No 6, 955-974

Abstract: Abstract The aim of this paper is to investigate the relationship between the IPO withdrawal decision and the number of secondary shares during the weak stock market conditions. Our results suggest that the withdrawal decision is determined by who plans to sell their shares at the IPO. The findings are as follows. The secondary shares of VCs are positively correlated with an IPO withdrawal decision. The secondary shares of CEOs are only correlated when the CEOs retained ownership is low, and not when CEOs retained ownership is high. These results imply that the VC profit maximization behavior is a key variable in determining IPO withdrawal.

Keywords: Withdrawn IPOs; Secondary shares; Market conditions; G20; G30; G31; L26 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s11187-019-00169-2

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