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UK IPO underpricing and venture capitalists

Coakley, J and Hadass, L and Wood, A (2009) 'UK IPO underpricing and venture capitalists.' The European Journal of Finance, 15 (4). 421 - 435. ISSN 1351-847X

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Abstract

We analyze the nature and causes of short run underpricing for a unique sample of 591 IPOs issued on the London Stock Exchange for the period 1985-2003. We find significant differences between the 1998-2000 bubble years and the rest of the sample. Venture capitalists and reputable underwriters played a certification role in the latter period but not during the bubble years. These years featured significant increases in underpricing, money left on the table, and a decline in operating quality. The combination of venture capitalists and prestigious underwriters were increasingly associated with the highest underpricing witnessed during 1998-2000 which provides indirect support for the spinning hypothesis.

Item Type: Article
Uncontrolled Keywords: IPO underpricing, venture capital, certification hypothesis, spinning
Subjects: H Social Sciences > HG Finance
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Andrew Wood
Date Deposited: 17 Nov 2011 09:46
Last Modified: 30 Nov 2017 22:15
URI: http://repository.essex.ac.uk/id/eprint/1518

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