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

Author

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  • Martijn J. Assem

    (Vrije Universiteit Amsterdam)

  • Nico L. Sar

    (Erasmus University Rotterdam)

  • Philippe Versijp

    (University of Amsterdam)

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.

Suggested Citation

  • Martijn J. Assem & Nico L. Sar & Philippe Versijp, 2017. "CEOs and CFOs on IPOs: The Process and Success of Going Public," De Economist, Springer, vol. 165(4), pages 381-410, December.
    • Handle: RePEc:kap:decono:v:165:y:2017:i:4:d:10.1007_s10645-017-9302-y
    DOI: 10.1007/s10645-017-9302-y
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    More about this item

    Keywords

    Initial public offering; Survey; Going public; IPO process; IPO success; Valuation; Lead manager; Syndicate; Pre-marketing; Book building;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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