The Post-issue Operating Performance Of Ipo Firms

3304 words, 14 pages

Intro Sample...


Moreover, based on the agency theory hypothesis and the signaling hypothesis, they mentioned that the IPO firms where entrepreneurs retain higher ownership normally show superior performance relative to other issuing firms both before and after adjustment for industry effects. The authors are interested in this issue. So, they examine the relation between management ownership and operating performance. In addition, they investigate whether IPO underpricing and post-IPO operating performance have the relations as suggested by the signaling models which predicts that IPO firm that is underpriced should demonstrate greater operating performance in comparison to those that is not. Part 3 explains the results of market expectations and earnings performance decline significantly after post-issue, showing in M/B and P/E ratios. Finally, part 4 is the conclusion of this article.

Summary of the important findings of the article
Jain and Kini observed that the operating performance as measured by the operating return on assets and operating cash flows scaled by assets of IPO firms decline relative to their pre-IPO levels, both before and after adjustment for industry effects. They tried to figure out for the reasons behind this situation and came up with some prospects. What if the IPO firms cannot generate income at the pre-IPO levels, managers reduce the required level of capital expenditures or positive NPV projects may have negative earnings and huge investments in the early periods. They studied the growth in sales, asset turnover and CAPEX for IPO firms to examine these possibilities. They found evidence that the IPO firms have high sales growth, declines in asset turnover and high CAPEX relative to their industry counterparts in the post-IPO period. So, the declining operating performance cannot be assumed due to a lack of sales growth opportunities or reduction in post-IPO CAPEX. They also find t View More »

Read More

Related Essays on The Post-Issue Operating Performance of Ipo Firms

  • Home

    248 words, 1 page

    There is a good example of the essay.Summary- Some big companies such as Prada decided to delay or even canceled their IPO plans because of the current stock situation. One analysis said that the IPO volume will fall another 25 percent annually in 2009 after the 45 percent decline in 2008. In 2007, almost 250 IPOs took place, but in 2008 only less than 50 IPOs came in the global market. Even though Visa succeeded to get the money by a U.S company for $17.9 billion for its IPO, which was the largest ever float, the number of IPO is not likely to increase. One main reason to stop the number of

    View Document »

    Import Performance

    11140 words, 45 pages

    Banking Sector Performance, Regulation and Bank Supervision Chapter-5 32 other hand, PCBs' deposits in 2006 amounted to Taka 955.5 billion or 51.3 percent of the total industry deposit against Taka 731.3 billion or 47.0 percent in 2005. FCBs' deposits in 2006 rose by Taka 38.2 billion or 33.9 percent over the previous year. The DFIs' deposits in 2006 were Taka 100.2 billion against Taka 89.5 billion in 2005 showing an increase of 12.0 percent over the year. Aggregated Balance Sheet 5.4 Assets: Aggregate industry assets in 2006 registered an overall increase by 17.8 percent over 2

    View Document »

    Business Performance Management

    7242 words, 29 pages

    BUSINESS PERFORMANCE MANAGEMENT IN RETAIL INDUSTRY ABSTRACT The ability of businesses to drive sustained improvement in their performance is significantly hampered by the seven challenges (strategic misalignment, local optimization, uncompetitive reactions times, etc.). The situation is being continually exasperated due to the factors such as volatile economic and regulatory conditions, emerging management techniques, multi-organization business models and underutilized operational information. In this research paper we are discussing as how BPM helps in resolving the above factors, BPM

    View Document »

    Regulating Broadband In Chile: The Debate Over Open Access

    2017 words, 9 pages

    UGBA101A 1. Telephone companies were given the opportunity to set their own prices unless Chile’s antitrust agency determined that there was not sufficient competition for a certain service or geographical region. As a result, the telecommunications regulatory agency, known as SUBTEL, would determine the maximum price the dominating firm could charge for the given service or region. However, firms outside of the one dominating were allowed to set any price they saw fit and could change the prices whenever they desired. The price that SUBTEL ultimately established was reliant upon assumptio

    View Document »

    Human Resource Management

    3509 words, 15 pages

    ‘Performance Management is the most important HRM function, as it measures the effectiveness of Human Resource Management Strategy’ Performance Management is considered as “the number one strategic initiative for companies today” according to David Blansfield, publisher of Business Finance Magazine (2002, p.1). Performance Management (PM) is a common tool in today’s organizations. In fact, in a survey taking into account 1,200 organizations, 95% declared to use a formal performance evaluation system (Stoskopf, 2002). Therefore, PM is seen as one of the most important HRM functions, if not t

    View Document »

    Operational Effectivess

    4547 words, 19 pages

    Most of the company’s have a performance measurement and management system which deals with enhancing the performance of individuals or operations in a company, may it be a manufacturing or a non- manufacturing company. Performance measurement (PM) is a useful tool that helps the company reach its goals, and goals are straightforwardly described by Goldratt as, “the goal of a firm is to make money’, and without the right performance of individuals and operations, it cannot reach its goals. (TXTBK OPERATIONS MGT FOR COMPETITIVE EDGE). First will define PM, and explain the use of PM in comtemp

    View Document »

    Business In Pakistan

    4540 words, 19 pages

    Doing Business in Pakistan 1. Methodology 1. Choosing the topic 2. Formulating the research questions 3. Objective of the Research 4. Research Model 2. Theoretical Framework PEST Analysis Political and Legal Environment Economic Environment Socio-Cultural Environment Technological Environment Porter Five Forces Threats of New Entrants Intensity of rivalry among existing competitors Bargaining Power of Buyers Bargaining power of Suppliers Threat of Substitute

    View Document »

    Bpo In India- An Overview

    9002 words, 37 pages

    BPO in India – an overview Contents I. Introduction II. What is BPO? • Types of BPO • Key services in various sectors III. Indian BPO Market IV. Market Segments and Trends • Banking sector • Insurance • Healthcare • Media/Publishing • Offshore Software Development • Network Outsourcing Services • HR Outsourcing V. Popular destinations VI. Employment opportunities VII. Key players in the market a. Indian companies b. MNCs VIII. Global competition IX. Future/outlook I. Introduction: Late 90’s has opened

    View Document »

    Riordan Problem Solution And Defense

    7031 words, 29 pages

    Running head: PROBLEM SOLUTION: RIORDAN MANUFACTURING Problem Solution: Riordan Manufacturing University of Phoenix Problem Solution: Riordan Manufacturing The objective of this paper is to exhibit an organized approach using the 9-step Problem-Solving Approach to provide Riordan Manufacturing with legitimate solutions to challenges presented. In addition, the paper identifies opportunities and issues, defines the problem, and develops a set of alternative solutions. In conclusion, the paper recommends the paramount alternatives to implement in order for Riordan Manufacturing to

    View Document »

    Special Economic Zones In India

    21349 words, 86 pages

    Introduction to Economic Zones “Export else perish “ these are the words of first Prime Minister of India Pt. Jawaharlal Nehru. India being a continent like country having 30 states, more than 1000 languages and world second largest man power having diversified natural conditions right from Rain Forests of Kerala, Ice Mountains of Himalaya, Runn of Kuch to productive land of Bramahaputra has great potentials of world class export worthy products from various industries like Agriculture, Engineering, Chemicals, Software’s, Gems and Jewellry, Pharmaceuticals, Bio technology and many more.

    View Document »

More Popular Essays

Research help is just moments away!