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The short-term timing of initial public offerings

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  • Bouis, Romain

Abstract

This paper examines the effect of stock market conditions on the waiting time of initial public offering (IPO) candidates, from the date firms file a registration statement with the Securities and Exchange Commission (SEC) to the effective IPO date. I find that issuers are going public faster when time-varying stock market valuations are high, and when time-varying market returns and time-varying market volatility are low. The volatility effect is not driven by regulatory delays consecutive to changes in the terms of the offers during the IPO process. Taken together, these results indicate that firms use a short-term market timing strategy when deciding the right time to go public and are consistent with a real option interpretation of IPO timing.

Suggested Citation

  • Bouis, Romain, 2009. "The short-term timing of initial public offerings," Journal of Corporate Finance, Elsevier, vol. 15(5), pages 587-601, December.
  • Handle: RePEc:eee:corfin:v:15:y:2009:i:5:p:587-601
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    References listed on IDEAS

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    Cited by:

    1. Zhiqiang HU & Yizhu WANG, 2013. "The IPO Cycles in China's A-share IPO Market: Detection Based on a Three Regimes Markov Switching Model," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 115-131, October.
    2. Karanović Goran & Karanović Bisera, 2016. "IPOs Performance Analysis: Evidence from Emerging Markets in the Balkans," Scientific Annals of Economics and Business, De Gruyter Open, vol. 63(3), pages 381-389, November.
    3. Vithanage, Kulunu & Neupane, Suman & Chung, Richard, 2016. "Multiple lead underwriting syndicate and IPO pricing," International Review of Financial Analysis, Elsevier, vol. 48(C), pages 193-208.
    4. Hugh M.J. Colaco & Shantaram P. Hegde, 2013. "Underwriter reputation, bookbuilding and IPO duration," Chapters,in: Handbook of Research on IPOs, chapter 8, pages 159-176 Edward Elgar Publishing.
    5. Vithessonthi, Chaiporn, 2014. "What explains the initial return of initial public offerings after the 1997 Asian financial crisis? Evidence from Thailand," Journal of Multinational Financial Management, Elsevier, vol. 27(C), pages 89-113.
    6. Patrascu (Sandu) Diana – Ramona, 2014. "The Decision Of Going Public – When, Where And Why?," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 1, pages 166-172, February.

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