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Underpricing in the Swedish IPO market: Can investors earn abnormal returns by investing in IPOs?
Jönköping University, Jönköping International Business School.
2012 (English)Independent thesis Advanced level (degree of Master (One Year)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

This thesis examines underpricing in Sweden using unique data on the 185 firms going public through initial public offerings (IPOs) and listing on the Stockholm Stock Exchange between 1994-2011. The average initial return in the Swedish IPO market adjusted for index movements is 11.49% but underpricing of individual IPOs was as high as 241.04%. Further, time trends in underpricing, the level of average initial returns effect on IPO supply underpricing and differences between sectors, segments and investment banks are examined. Finally, it is argued that investors must be rewarded for taking the high risk associated with IPO investing and that the average initial return of 11.49% is a reasonable compensation for that risk.

Place, publisher, year, edition, pages
2012. , 45 p.
Keyword [en]
Initial Public Offerings (IPOs), IPO underpricing in Sweden, time trends in IPO pricing, underpricing patterns.
National Category
Business Administration
URN: urn:nbn:se:hj:diva-18404OAI: diva2:532595
Social and Behavioural Science, Law
Available from: 2012-08-13 Created: 2012-06-11 Last updated: 2012-08-13Bibliographically approved

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Underpricing in the Swedish IPO market: Can investors earn abnormal returns by investing in IPOs?(3249 kB)1310 downloads
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