An IPO Pitfall: Patent Lawsuits

48 Pages Posted: 12 Nov 2019

See all articles by Tolga Caskurlu

Tolga Caskurlu

University of Amsterdam Business School

Multiple version iconThere are 2 versions of this paper

Date Written: October 30, 2019

Abstract

I document a previously unexplored substantial cost of an initial public offering (IPO): patent lawsuits. I find that firms become targets of excessive patent lawsuits shortly before IPO completions, and the litigation intensity persists after firms become public. However, firms that withdraw their IPO filings do not experience an increase after the withdrawal date. Unlike IPOs, seasoned equity offerings (SEO) do not yield an increase in lawsuits. Overall, these results show that going public makes firms vulnerable to costly lawsuits. Moreover, the percentage of IPO firms affected from patent lawsuits has been perilously soaring in the last two decades.

Keywords: IPO, Patents, Patent Lawsuits

JEL Classification: G34, O32, K10

Suggested Citation

Caskurlu, Tolga, An IPO Pitfall: Patent Lawsuits (October 30, 2019). Available at SSRN: https://ssrn.com/abstract=3479253 or http://dx.doi.org/10.2139/ssrn.3479253

Tolga Caskurlu (Contact Author)

University of Amsterdam Business School ( email )

Roetersstraat 18
Amsterdam, 1018WB
Netherlands

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