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Allocation of shares to foreign and domestic investors: Firm and ownership characteristics in Swedish IPOs

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  • Abrahamson, Martin
  • De Ridder, Adri

Abstract

In this article, we analyze underpricing of initial public offerings (IPOs) and holdings following offerings in Sweden. By exploiting a unique hand-collected data set with information on the ultimate holdings by institutional and individual investors, as well as boards of directors, we find, as most prior studies, that IPOs on average are underpriced. IPOs with low (high) initial return have higher (lower) holdings by individual investors. Institutional investors are, to a greater extent than individual investors, also able to identify underpriced firms.

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  • Abrahamson, Martin & De Ridder, Adri, 2015. "Allocation of shares to foreign and domestic investors: Firm and ownership characteristics in Swedish IPOs," Research in International Business and Finance, Elsevier, vol. 34(C), pages 52-65.
    • Handle: RePEc:eee:riibaf:v:34:y:2015:i:c:p:52-65
    DOI: 10.1016/j.ribaf.2014.12.002
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    Cited by:

    1. Abrahamson, Martin, 2016. "“Rookies to the stock market: A portrait of new shareholders”," Research in International Business and Finance, Elsevier, vol. 38(C), pages 565-576.
    2. Smadar Siev & Mahmoud Qadan, 2022. "Call Me When You Grow Up: Firms’ Age, Size, and IPO Performance across Sectors," JRFM, MDPI, vol. 15(12), pages 1-22, December.
    3. Dereeper, Sebastien & Mashwani, Asad Iqbal, 2018. "Equity carve-outs, divergence of beliefs and analysts’ following," Research in International Business and Finance, Elsevier, vol. 43(C), pages 58-67.

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