Latent class analysis of IPOs in the Nordics.
We examine how the offer size of initial public offerings (IPOs) and the market return on their issue date are related to the pricing of 314 IPOs issued by firms in Denmark, Finland, Norway and Sweden at the one-day, one-week and four-week horizons using latent class analysis, which is a structural...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Public Library of Science (PLoS)
2021-01-01
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| Series: | PLoS ONE |
| Online Access: | https://doi.org/10.1371/journal.pone.0259510 |
| _version_ | 1818943240519286784 |
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| author | Mikael Bask Anton Läck Nätter |
| author_facet | Mikael Bask Anton Läck Nätter |
| author_sort | Mikael Bask |
| collection | DOAJ |
| description | We examine how the offer size of initial public offerings (IPOs) and the market return on their issue date are related to the pricing of 314 IPOs issued by firms in Denmark, Finland, Norway and Sweden at the one-day, one-week and four-week horizons using latent class analysis, which is a structural equation methodology. We identify four latent classes at each time horizon, where classes (i)-(ii) include a greater number of IPOs: (i) large-sized and underpriced IPOs; (ii) small-sized and overpriced IPOs; (iii) small-sized and severely underpriced IPOs; and (iv) large-sized IPOs that are overpriced at the one-day horizon but underpriced at the four-week horizon. The market returns are normal in latent classes (i)-(iii) and weak in class (iv). Approximately half of the IPOs in the technology sector are in the latent class with small-sized and overpriced IPOs, and most of the IPOs in the class with small-sized and severely underpriced IPOs are in the healthcare sector. Finally, the underpricing of IPOs is not corrected after one or four weeks of trading. Instead, the mean return and the standard deviation of returns increase with the time horizon. |
| first_indexed | 2024-12-20T07:24:11Z |
| format | Article |
| id | doaj.art-2c08ec45e88d40fda7e5066ab8ac44d2 |
| institution | Directory Open Access Journal |
| issn | 1932-6203 |
| language | English |
| last_indexed | 2024-12-20T07:24:11Z |
| publishDate | 2021-01-01 |
| publisher | Public Library of Science (PLoS) |
| record_format | Article |
| series | PLoS ONE |
| spelling | doaj.art-2c08ec45e88d40fda7e5066ab8ac44d22022-12-21T19:48:34ZengPublic Library of Science (PLoS)PLoS ONE1932-62032021-01-011611e025951010.1371/journal.pone.0259510Latent class analysis of IPOs in the Nordics.Mikael BaskAnton Läck NätterWe examine how the offer size of initial public offerings (IPOs) and the market return on their issue date are related to the pricing of 314 IPOs issued by firms in Denmark, Finland, Norway and Sweden at the one-day, one-week and four-week horizons using latent class analysis, which is a structural equation methodology. We identify four latent classes at each time horizon, where classes (i)-(ii) include a greater number of IPOs: (i) large-sized and underpriced IPOs; (ii) small-sized and overpriced IPOs; (iii) small-sized and severely underpriced IPOs; and (iv) large-sized IPOs that are overpriced at the one-day horizon but underpriced at the four-week horizon. The market returns are normal in latent classes (i)-(iii) and weak in class (iv). Approximately half of the IPOs in the technology sector are in the latent class with small-sized and overpriced IPOs, and most of the IPOs in the class with small-sized and severely underpriced IPOs are in the healthcare sector. Finally, the underpricing of IPOs is not corrected after one or four weeks of trading. Instead, the mean return and the standard deviation of returns increase with the time horizon.https://doi.org/10.1371/journal.pone.0259510 |
| spellingShingle | Mikael Bask Anton Läck Nätter Latent class analysis of IPOs in the Nordics. PLoS ONE |
| title | Latent class analysis of IPOs in the Nordics. |
| title_full | Latent class analysis of IPOs in the Nordics. |
| title_fullStr | Latent class analysis of IPOs in the Nordics. |
| title_full_unstemmed | Latent class analysis of IPOs in the Nordics. |
| title_short | Latent class analysis of IPOs in the Nordics. |
| title_sort | latent class analysis of ipos in the nordics |
| url | https://doi.org/10.1371/journal.pone.0259510 |
| work_keys_str_mv | AT mikaelbask latentclassanalysisofiposinthenordics AT antonlacknatter latentclassanalysisofiposinthenordics |