The Initial Public Offerings of Listed Firms

Francois Derrien () and Ambrus Kecskes
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Ambrus Kecskes: Rotman School of Management, University of Toronto - University of Toronto

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Abstract: A number of firms in the United Kingdom first list without issuing equity and then issue equity shortly thereafter. We argue that this two-stage offering strategy is less costly than an IPO because trading reduces the valuation uncertainty of these firms before they issue equity. We find that initial return is 10% to 30% lower for these firms than for comparable IPOs, and we provide evidence that the market in the firm's shares lowers financing costs. We also show that these firms time the market both when they list and when they issue equity.

Keywords: Corporate finance; financial economics (search for similar items in EconPapers)
Date: 2007-02-02
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Citations: View citations in EconPapers (26)

Published in The Journal of Finance, 2007, Vol.62, n°1, pp.447-479. ⟨10.1111/j.1540-6261.2007.01212.x⟩

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Journal Article: The Initial Public Offerings of Listed Firms (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00480837

DOI: 10.1111/j.1540-6261.2007.01212.x

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