Abstract
The length of time it takes an IPO firm to go public (called ‘waiting period’) reflects multiple layers of scrutiny from underwriters, auditors, venture capitalists, institutional investors, and regulators. Accordingly, we show that the waiting period is a good barometer of ex ante uncertainty about future cash flows and that it has predictive power after the firm goes public. We find that firms marked by short waiting periods experience lower underpricing and less uncertainty and superior stock/operating performance in the aftermarket. We also report that smaller firms are taking longer to go public after SOX Act, thus providing justification for the 2012 JOBS Act.
Original language | English |
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Pages (from-to) | 363-390 |
Journal | European Journal of Finance |
Volume | 24 |
Issue number | 5 |
Early online date | 16 Apr 2017 |
DOIs | |
Publication status | Published - 1 Mar 2018 |
Bibliographical note
This is an Accepted Manuscript of an article published by Taylor & Francis in European Journal of Finance on 16/04/17, available online: http://www.tandfonline.com/10.1080/1351847X.2017.1307770Keywords
- initial public offering
- waiting period
- underpricing
- ex ante uncertainty
- stock performance
- operating performance