The Development Of The Stock Market

The equity market, although heavily depressed since 2007, provided a much needed safety valve to shift financing away from debt to equity, especially considering the underdeveloped

(1) According to the case, global IPO activity during the first quarter of 2012 fell to $14.3 billion, which was dramatically down from $46.6 billion during the first quarter of 2011. In addition, we can see in Exhibit 5 that IPO activity in US have dropped sharply since the second quarter of 2011. Number of deals dropped from 383 in the second quarter of 2011 to 157 in the first quarter of 2012.

As our point of view, though IPO will lead to short-term ups and downs of stock price, it will eventually reflect the real values of the company in the long run, consisting the stock price with its long-term performance.

Our data includes public companies that have passed the IPO stage because KLD MSCI data is only available for public companies. In order to control for a potential bias in our analyses due to the choice of receiving venture backing among IPO companies, we gather a comprehensive data on an initial sample of 12,010 IPOs from the period 1991-2015 from the Securities Data Company (SDC) database. Following previous researchers, we eliminate offerings (i) identified as unit offerings (ii) not involving common stock, (iii) of very small issues with offer size below 5 million dollars in order to eliminate penny stocks from our sample (Bradley, Cooney, Dolvin, and Jordan, 2005), and (v) for which SDC did not provide information required for our tests.

Initial public offering refers to the sell of new shares in the primary market for the first time to the general public. This research paper tries to explain the IPO, IPO methods and IPO pricing phenomena. This study has collected all those IPOs which are listed at National Stock Exchange during the study period January 2014 to November 2015. This study focuses on the IPOs price performance whether it is overpriced or underpriced. The IPOs price performance has been calculated by the IPOs post listing data. This study evaluates the IPOs risk and return performance by using three different measures as Sharpe’s, Treynor’s and Jensen’s Alpha measure. And also try to keep an eye on market index performance during the study period. In this study, the IPOs return has concluded that the IPOs are underpriced and three models have also showed the superior return performance of IPOs than the market index performance. The investors are earned profits from their rational IPO investing decision. Due to the overperformance of IPOs and risk return analysis, it is concluded that the IPOs investment is less risky than the benchmark performance in the study period.

I compile, through various mediums, information regarding initial public offerings, or IPO’s. The report includes areas such as defining an IPO, the performance of IPO’s, the current market for IPO’s, and the process of buying an IPO. Therefore, the feasibility report is directed at the retail or non-professional investor who may be engaged in purchasing IPO’s. I look to determine if the underlying facts create certainty that these instruments are profitable currently and in the long run. It appears through study that investors have increased their consumption of initial public offerings since the 2007-2008 financial crisis. Many investors believe purchasing IPO’s can create quick realized gains. However, it appears that the performance of these issues has lagged the broader market, which in my opinion should steal zeal from these risky investments. The figures throughout this report should indicate and reaffirm that not all IPOs, whether popular or unpopular, will benefit the professional or non-professional investor. It must be noted that not everything is the same in financial markets and results may vary significantly from this report in a single incident or sample study.

It seems as if making money in these issues is easier than buying stock in the secondary market. Unfortunately many "hot issues" of IPOs produce a big chunk of their gains on the first day of trading. And most individual investors are not fortunate enough to get in on the floor of a promising IPO. The most attractive IPO’s are offered to certain clients first, mainly institutions, such as other corporations and pension plans, and big individual investors. Therefore it might be a good idea to buy an IPO once they begin trading on the secondary market. It is possible that the IPO after it begins trading could potentially produce a return similar to that of the average performance recorded by some small-cap stocks. When a

In the beginning, there was no real stock market. However stock exchanges did take place in smaller groups and corporations. This all took place during the 1700's where stocks were already around for a long time before that but it wasn't really popular in the United States. Stocks originally started as auctions where traders called out names of companies and the shares available. There was a auction that took place and the shares went to the highest bidders.

　　 paper will encompass the importance of the U.S stock market/stock exchange versus the Chinese stock market/ stock exchange, with a brief introduction about how each stock market/stock exchange came into existence, the importance of each stock market/stock exchange, how the U.S and Chinese manage their stock markets/stock exchange, how corporations are appointed plus the rules and regulations. This will also entail random facts about each stock market/stock exchange. Stock markets are like hitting a royal flush, if the price of your stocks goes up, you win; if it drops, you lose! The stock market, also known as the equity market, is one in which shares are owned by companies and their shareholders. The companies that are on the stock

In the event that Man Group plc retains 18.6% per cent of the MF Global shares. This paper explores the motivation and background behind Man Group’s strategy to spin off MF Global as well as the following performance of MF Global during the period between the IPO in 2007 and the completion of spin off in 2009. Besides, it examines the wealth effects of the complete spin-off on the stock price of Man Group and MF Global through setting abnormal return hypothesis and analysing Ordinary Least Squares (OLS) regression data. The primary hypothesis of the paper is that spin off proposal announcement result in positive short-term abnormal returns to shareholders of parent company. Besides, the motivation behind Man Group plc spin-off MF Global is discussed in the light of prior spin-off researches; it can be summarized into four categories including improvement of industrial focus, Information asymmetry, size of spin-off and wealth transfer of bondholders. The market-model method is adopted as useful methodology in capture market reaction of spin-off announcement since it fits the nature of the event with superior advantages. Also, the Scholes and Williams (1977) model is employed with the aim to eliminate the bias may exist in the OLS market model. Combined with the mainstream of spin-off event studies,

Alongside this, Kim & Weisbach** analysed numerous IPOs from over 38 countries, it was found that almost all the firms they studied had raised substantial amounts of new capital from their IPOs (2008).

Researches concerning on macro economy and stock markets of established markets have been widely studied in the past. Early studies in this area support the argument that stock market returns are influenced by economic announcements ( Hardouvelis, 1988 ). Additionally, authors such as Levine and Zervos ( 1996 ) have produced significant evidence that stock markets ' returns are influenced by macroeconomic indicators such as Gross Domestic Production ( GDP ), productivity, employment and interest rates.

An interesting feature of IPO markets is that they are very sensitive to stock market conditions. IPO volume soars following bull markets and contracts during bear markets. This means that IPO activity exhibits waves in tandem with stock market cycles. The organic link between the level of IPO activity and market conditions is strong. In the US, there were almost 1,000 IPOs during the dot-com boom years of 1999-2000, whereas there were less than 150 IPOs in 2001 after the internet bubble burst and less than 60 IPOs in 2008 when the financial crisis hit.

It also examines private equity and it is role in the US market. The authors using aggregate descriptive data, simplifying models, publish statistical analysis made a good introduction to private equity. They took deeper look on different aspects of the private equity and effects of recent financial crisis.

how long does the firm stays invested post the IPO, could be an indicator of the IPO’s long term performance. Often, hasty exits from an investment, also, known as quick-flips, may result into failure of an IPO. The level of Debt-to Equity ratio coupled with the amount of dividends paid by the PE firm to itself are some other deciding factors of an IPO’s long term performance. (Mian and Rosenfeld, 1993) study the long-term performance of 85 reverse LBOs for a three year period starting from one day after the firm goes public. They find that reverse LBOs show significant positive cumulative abnormal returns and most of these returns are a result of take-over activity which occurs mostly in the second year after the IPO. These findings were unlike that of Ritter (1991). Other earlier studies of Degeorge and Zeckhauser (1993) and Holthausen and Larcker(1996) also indicate that RLBOs outperform other general IPOs or the newly floated firms on the stock market.