ABSTRACT This Paper uses evidence from a dataset of 27 European IPOs to analyse how investors bid... more ABSTRACT This Paper uses evidence from a dataset of 27 European IPOs to analyse how investors bid and the factors that influence their allocations. We have the complete books for these deals - amounting to 5540 bids - and so can analyse directly how bids and allocations are related. All these deals are private sector IPOs where the bookrunner was a leading European investment bank. We make use of a unique ranking of investor quality, associated with the likelihood of flipping the IPO, as produced by a group of US and European investment banks. We find that 'high quality' investors are consistently favoured in allocation and in out-turn profits. We also find that bids submitted via the bookrunner and large bids received better pro-rata allocations and higher average profits. We find that a very small proportion of all bids submitted during the bookbuilding contain price limits - especially in hot IPOs - and, in contrast to Cornelli and Goldreich (2001), we do not find that that such bids are favoured in terms of allocation.
In recent years there has been an enormous amount of research into the way companies raise financ... more In recent years there has been an enormous amount of research into the way companies raise finance from stock markets. There are many reasons for this interest in 'initial public offerings' (IPOs): DT the capital-raising function of stock markets is particularly important in financing firms and encouraging entrepreneurship and growth DT the late 1990s witnessed an IPO boom in many
This chapter discusses the current issues of the French economy. It is obviously beyond the scope... more This chapter discusses the current issues of the French economy. It is obviously beyond the scope of this report to discuss all aspects. Our approach is therefore focussed on a central question: What is the current government trying to achieve economically and will it succeed? In order to address this question, we first provide some macroeconomic background and discuss it
The financial turmoil that originated in 2007 and developed into an unprecedented crisis batterin... more The financial turmoil that originated in 2007 and developed into an unprecedented crisis battering financial and real markets is the latest manifestation, on a grand scale and with new attributes, of a welldefined pathology in the process of market liberalization and integration in the post-Bretton Woods era. At the root of the crisis lies a fundamental inconsistency between financial globalisation
... For example, we show how banks can assist predator companies in the ... Our focus on the use ... more ... For example, we show how banks can assist predator companies in the ... Our focus on the use of share blocks as a mechanism for changing corporate control is closely related to the recent theoretical literature on the role of share blocks in explaining corporate performance. This ...
... JEL: G14, G34 Draft: February 2009 ∗ Comments welcome to tim.jenkinson@sbs.ox.ac.uk or miguel... more ... JEL: G14, G34 Draft: February 2009 ∗ Comments welcome to tim.jenkinson@sbs.ox.ac.uk or miguel.sousa@sbs.ox.ac.uk . Page 2. 2 ... Wasserstein and Steve Wozniak, as well as public figures such as Dan Quayle and former CIA director George Tenet. ...
The credit crunch was most likely viewed as a mixed blessing by many private equity executives. O... more The credit crunch was most likely viewed as a mixed blessing by many private equity executives. On the one hand, it signalled the end of the most favourable set of economic conditions the private equity industry had ever witnessed: abundant capital, low interest rates, increasing stock market values and a truly amazing willingness amongst banks and other investors to provide
This article uses clinical evidence to show how the German system of corporate control and govern... more This article uses clinical evidence to show how the German system of corporate control and governance is both more active and more hostile than has previously been suggested. It provides a complete breakdown of ownership and takeover defence patterns in German listed companies and finds highly fragmented (but not dispersed) ownership in non-majority controlled firms. We document how the accumulation
It is often taken as axiomatic that investors prefer high levels of regulation. Yet companies hav... more It is often taken as axiomatic that investors prefer high levels of regulation. Yet companies have increasingly chosen to list on stock exchanges with lower regulatory requirements. In this paper we analyse whether investors value high regulatory standards for quoted companies. We use the unusual regulatory environment observed in London – two alternative regulatory regimes with the same trading technology – to analyse these issues. We focus on 218 firms that chose to switch their trading ‘down’ from the highly regulated Main market to the lightly regulated AIM market, and 56 firms that moved ‘up’ to the Main market. Switching firms on average experience down (up) announcement returns of approximately -4% (+5%). However these initial reactions are reversed over several months after the actual switch. Our results suggest that particular investor clienteles exist for the two markets, and that other investors who place little value on the higher regulatory standards become ...
The relationship between investment managers and brokers has been identied by regulators in Europ... more The relationship between investment managers and brokers has been identied by regulators in Europe and the US as a potentially important source of conicts of in-
Despite the central importance of investors to all initial public offering (IPO) theories, relati... more Despite the central importance of investors to all initial public offering (IPO) theories, relatively little is known about their role in practice. This article is based on a survey of how institutional investors assess IPOs, what information they provide to the investment banking syndicate, and the factors they believe influence allocations. We find that investor characteristics, in particular brokerage relationships
The introduction of competition into utilities is currently being pursued in the many countries, ... more The introduction of competition into utilities is currently being pursued in the many countries, including the UK. Competition can take various forms, such as competition for outputs, inputs, franchises, and outright takeovers. Attention is currently focused on output ...
ABSTRACT This Paper uses evidence from a dataset of 27 European IPOs to analyse how investors bid... more ABSTRACT This Paper uses evidence from a dataset of 27 European IPOs to analyse how investors bid and the factors that influence their allocations. We have the complete books for these deals - amounting to 5540 bids - and so can analyse directly how bids and allocations are related. All these deals are private sector IPOs where the bookrunner was a leading European investment bank. We make use of a unique ranking of investor quality, associated with the likelihood of flipping the IPO, as produced by a group of US and European investment banks. We find that 'high quality' investors are consistently favoured in allocation and in out-turn profits. We also find that bids submitted via the bookrunner and large bids received better pro-rata allocations and higher average profits. We find that a very small proportion of all bids submitted during the bookbuilding contain price limits - especially in hot IPOs - and, in contrast to Cornelli and Goldreich (2001), we do not find that that such bids are favoured in terms of allocation.
In recent years there has been an enormous amount of research into the way companies raise financ... more In recent years there has been an enormous amount of research into the way companies raise finance from stock markets. There are many reasons for this interest in 'initial public offerings' (IPOs): DT the capital-raising function of stock markets is particularly important in financing firms and encouraging entrepreneurship and growth DT the late 1990s witnessed an IPO boom in many
This chapter discusses the current issues of the French economy. It is obviously beyond the scope... more This chapter discusses the current issues of the French economy. It is obviously beyond the scope of this report to discuss all aspects. Our approach is therefore focussed on a central question: What is the current government trying to achieve economically and will it succeed? In order to address this question, we first provide some macroeconomic background and discuss it
The financial turmoil that originated in 2007 and developed into an unprecedented crisis batterin... more The financial turmoil that originated in 2007 and developed into an unprecedented crisis battering financial and real markets is the latest manifestation, on a grand scale and with new attributes, of a welldefined pathology in the process of market liberalization and integration in the post-Bretton Woods era. At the root of the crisis lies a fundamental inconsistency between financial globalisation
... For example, we show how banks can assist predator companies in the ... Our focus on the use ... more ... For example, we show how banks can assist predator companies in the ... Our focus on the use of share blocks as a mechanism for changing corporate control is closely related to the recent theoretical literature on the role of share blocks in explaining corporate performance. This ...
... JEL: G14, G34 Draft: February 2009 ∗ Comments welcome to tim.jenkinson@sbs.ox.ac.uk or miguel... more ... JEL: G14, G34 Draft: February 2009 ∗ Comments welcome to tim.jenkinson@sbs.ox.ac.uk or miguel.sousa@sbs.ox.ac.uk . Page 2. 2 ... Wasserstein and Steve Wozniak, as well as public figures such as Dan Quayle and former CIA director George Tenet. ...
The credit crunch was most likely viewed as a mixed blessing by many private equity executives. O... more The credit crunch was most likely viewed as a mixed blessing by many private equity executives. On the one hand, it signalled the end of the most favourable set of economic conditions the private equity industry had ever witnessed: abundant capital, low interest rates, increasing stock market values and a truly amazing willingness amongst banks and other investors to provide
This article uses clinical evidence to show how the German system of corporate control and govern... more This article uses clinical evidence to show how the German system of corporate control and governance is both more active and more hostile than has previously been suggested. It provides a complete breakdown of ownership and takeover defence patterns in German listed companies and finds highly fragmented (but not dispersed) ownership in non-majority controlled firms. We document how the accumulation
It is often taken as axiomatic that investors prefer high levels of regulation. Yet companies hav... more It is often taken as axiomatic that investors prefer high levels of regulation. Yet companies have increasingly chosen to list on stock exchanges with lower regulatory requirements. In this paper we analyse whether investors value high regulatory standards for quoted companies. We use the unusual regulatory environment observed in London – two alternative regulatory regimes with the same trading technology – to analyse these issues. We focus on 218 firms that chose to switch their trading ‘down’ from the highly regulated Main market to the lightly regulated AIM market, and 56 firms that moved ‘up’ to the Main market. Switching firms on average experience down (up) announcement returns of approximately -4% (+5%). However these initial reactions are reversed over several months after the actual switch. Our results suggest that particular investor clienteles exist for the two markets, and that other investors who place little value on the higher regulatory standards become ...
The relationship between investment managers and brokers has been identied by regulators in Europ... more The relationship between investment managers and brokers has been identied by regulators in Europe and the US as a potentially important source of conicts of in-
Despite the central importance of investors to all initial public offering (IPO) theories, relati... more Despite the central importance of investors to all initial public offering (IPO) theories, relatively little is known about their role in practice. This article is based on a survey of how institutional investors assess IPOs, what information they provide to the investment banking syndicate, and the factors they believe influence allocations. We find that investor characteristics, in particular brokerage relationships
The introduction of competition into utilities is currently being pursued in the many countries, ... more The introduction of competition into utilities is currently being pursued in the many countries, including the UK. Competition can take various forms, such as competition for outputs, inputs, franchises, and outright takeovers. Attention is currently focused on output ...
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