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The Initial Public Offerings of Listed Firms

François Derrien

HEC Paris - Finance Department

Ambrus Kecskes

York University - Schulich School of Business

July 22, 2005

AFA 2006 Boston Meetings, Forthcoming
EFA 2005 Moscow Meetings
Journal of Finance, Vol. 62, No. 1, p.447-479, 2007

A number of firms in the United Kingdom first list without issuing equity and then issue equity shortly thereafter. We argue that this two-stage offering strategy is less costly than an IPO because trading reduces the valuation uncertainty of these firms before they issue equity. We find that initial return is 10% to 30% lower for these firms than for comparable IPOs, and we provide evidence that the market in the firm's shares lowers financing costs. We also show that these firms time the market both when they list and when they issue equity.

Number of Pages in PDF File: 54

JEL Classification: G31

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Date posted: February 16, 2005  

Suggested Citation

Derrien, François and Kecskes, Ambrus, The Initial Public Offerings of Listed Firms (July 22, 2005). AFA 2006 Boston Meetings, Forthcoming; EFA 2005 Moscow Meetings; Journal of Finance, Vol. 62, No. 1, p.447-479, 2007. Available at SSRN: http://ssrn.com/abstract=667604 or http://dx.doi.org/10.2139/ssrn.667604

Contact Information

François Derrien
HEC Paris (Groupe HEC) - Finance Department ( email )
1 rue de la Liberation
Jouy-en-Josas Cedex, 78351
33 1 39 67 72 98 (Phone)
HOME PAGE: http://www.hec.fr/derrien

Ambrus Kecskes (Contact Author)
York University - Schulich School of Business ( email )
4700 Keele Street
Toronto, Ontario M3J 1P3
Feedback to SSRN

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