Strategic Waiting in the IPO Markets

29 Pages Posted: 12 Mar 2009 Last revised: 25 Sep 2011

See all articles by Gonul Colak

Gonul Colak

University of Sussex ; Hanken School of Economics

Hikmet Gunay

University of Manitoba; HIAS

Date Written: July 30, 2011


The paper analyzes the strategic waiting tendencies of IPO firms. Our model shows why some high-quality firms may strategically delay their initial public offering until a favorable signal about the economic conditions is generated by other issuing firms. Survival analysis suggests that IPOs in the highest quality decile have significantly higher median waiting days (since the start of a rising IPO cycle) than the IPOs in the lowest decile. During the early stages of an expanding IPO cycle the average firm quality is lower than in its later stages. We find supporting evidence also from the IPOs of future S&P500 firms.

Keywords: IPO Clustering, IPO Cycles, Social Learning, Strategic Waiting, Survival Analysis

JEL Classification: C41, C72, D82, D83, G20, E32

Suggested Citation

Colak, Gonul and Gunay, Hikmet, Strategic Waiting in the IPO Markets (July 30, 2011). Journal of Corporate Finance, Vol. 17, pp. 555-583, 2011, Available at SSRN:

Gonul Colak (Contact Author)

University of Sussex ( email )

Jubilee Building
Brighton, BN1 9SN
United Kingdom

Hanken School of Economics ( email )

P.O. Box 479
Arkadiankatu 22
FI-00100 Helsinki, 00100

Hikmet Gunay

University of Manitoba ( email )

Winnipeg R3T 5V5, Manitoba

HIAS ( email )

2-1 Naka Kunitachi-shi
Tokyo 186-8601

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