Grant detail

GAUK 729016 The role of information in price development of stocks in IPO segment - rejected (November 2015)

Principal investigator: Mgr. Lenka Dvořáková Švejdová
Collaborators: PhDr. Petra Luňáčková Ph.D.
Description: The number of IPOs after the financial crisis has seen a steady annual increase in all but one of the past six years both in USA and Europe, with year 2014 being for US markets a record year since 2000. In case of Europe, 1Q IPO activity was the highest since dot com bubble. IPO segment therefore gradually regains its attention within the financial markets, increasing its importance with investors, while topping the annual gains of the major market indices over the first year. Nevertheless, issues like overoptimistic market reaction and long-term underperformance also surround IPOs. Since such stocks have no trading history and information on the company or guidance is rather limited, any presented information or analyst opinion might have greater effect on investors' decision making process and on price performance of specific stock than it would have on stock with relevant trading history and long-term analyst coverage. Morever, internet enables to spread any information to wide public in a very short time, with nearly immediate impact. Our research project will focus on picked post-crisis initial price offerings (IPOs) and will try to look at what kind of information affected the stock value for a defined period of time after the offering (1 year). Nature of the news as well as reactions and estimates of analysts will be taken into account, together with other factors. The analysis should include testing behavioral finance models of market under- and overreaction in relation to selected IPOs.
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End date: 2015
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Partners

Deloitte

Sponsors

CRIF
McKinsey
Patria Finance