Post-IPO performance and its association with subscription cascades and issuers’ strategic-political importance

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• 作者：Paul B. McGuinness
• 关键词：IPOs ; Hong Kong ; Strategic ; political importance ; Buy ; and ; hold returns ; Turnover ; Net profit ; Investor ‘cascades’
F00 ; G00 ; 01 ; G10 ; G15 ; G18 ; G38
• 刊名：Review of Quantitative Finance and Accounting
• 出版年：2016
• 出版时间：February 2016
• 年：2016
• 卷：46
• 期：2
• 页码：291-333
• 全文大小：635 KB
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• 作者单位：Paul B. McGuinness (1)
  
  1. Department of Finance, The Business Administration Faculty, The Chinese University of Hong Kong, Room 1212, Cheng Yu Tung Building, Sha Tin, New Territories, Hong Kong
  
• 刊物类别：Business and Economics
• 刊物主题：Economics
  Finance and Banking
  Accounting and Auditing
  Econometrics
  Operation Research and Decision Theory
  
• 出版者：Springer Netherlands
• ISSN：1573-7179

文摘

This study focuses on the strategic-political importance of firms undertaking IPO in China’s international Hong Kong market. This market setting is of particular interest given the unique mix of state-backed and privately-owned issuers drawn to it. I find that an issuer’s strategic-political importance is strongly and positively related to post-IPO returns. An issuer’s strategic-political importance is also negatively correlated with the variance of changes in its post-listing earnings and revenue. Overall, the present study suggests that state support correlates with enhanced post-IPO stock returns and more stable sales turnover and earnings. However, results show that state ownership does not necessarily translate into increased post-IPO revenue and earnings growth. The paper’s second major contribution relates to the identification of pronounced subscription “cascades” (Welch in J Financ 67(2):695–732, 1992) and how these correlate with post-IPO returns. Results suggest that insipid (overly exuberant) subscription demand presages strong (weak) post-listing returns. Consistent with “cascade” arguments (Welch 1992), return reversals occur without commensurate revenue or earnings change. Finally, and in terms of valuation uncertainty (Miller in J Financ 32(4):1151–1168, 1977), findings point to an inverse association between post-IPO stock returns and the magnitude of an issue’s prospectus-disclosed offer price range. Keywords IPOs Hong Kong Strategic-political importance Buy-and-hold returns Turnover Net profit Investor ‘cascades’