IPO Underpricing and Ownership Structure: A Comparison of Family Firms and Non-Family Firms
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Underpricing in an Initial Public Offering (IPO) is often used as a means of retaining control of the company when going public. Therefore, first day returns post-IPO can be substantial for investors. Ownership structure is directly linked to IPOs where in particular family control is interesting due to the special link families have to their firms. Sweden has a great portion of family firms and is also the country that uses dual class share structures to the largest extent. With this study, we examine family control in terms of voting rights related to initial returns for IPOs. Additionally, we investigate this relation with regards to family firms and non-family firms and the usage of dual class share structures. This is conducted by using a hand-collected data set of 165 Swedish IPO firms between years 2000-2015. The results indicate that family firms use dual class share structures to a larger extent than non-family firms. In addition, it indicates that family firms use dual class share structures instead of underpricing the share in order to retain control of the company.
Place, publisher, year, edition, pages
2016. , 45 p.
Initial public offering, IPO, family firms, initial return, underpricing, dual class share structure
IdentifiersURN: urn:nbn:se:uu:diva-296602OAI: oai:DiVA.org:uu-296602DiVA: diva2:938991
Subject / course
Master Programme in Business and Management
De Ridder, Adri