Download this Paper Open PDF in Browser

Do Risk Factors Matter in the IPO Valuation?

Journal of Financial Regulation and Compliance, Vol. 15, No. 1, pp. 63-89, 2007

45 Pages Posted: 10 Apr 2007 Last revised: 11 May 2009

Khaled Abdou

Pennsylvania State University Berks

Mehmet F. Dicle

Loyola University New Orleans - Joseph A. Butt, S.J. College of Business

Abstract

The paper investigates whether all of the risk factors priced during the Internet bubble period. To answer this question, we use a unique hand collected dataset from public prospectuses for companies that issued an initial public offering during the Internet bubble period. We propose three hypotheses: 1- The risk factors mentioned in the prospectus are important for IPO trading and therefore affect IPO underpricing, 2- Risk factors affect the IPO deal attributes, and 3- The number of risk factors cited by the issuing firm is affected by direct participants such as venture capitalists and investment bankers.

Keywords: Risk Factors, IPOs, Underpricing, Internet Bubble

JEL Classification: G32, G24, G14

Suggested Citation

Abdou, Khaled and Dicle, Mehmet F., Do Risk Factors Matter in the IPO Valuation?. Journal of Financial Regulation and Compliance, Vol. 15, No. 1, pp. 63-89, 2007. Available at SSRN: https://ssrn.com/abstract=687438

Khaled Abdou (Contact Author)

Pennsylvania State University Berks ( email )

Tulpehocken Road
P.O. Box 7009
Reading, PA 19610
United States

Mehmet F. Dicle

Loyola University New Orleans - Joseph A. Butt, S.J. College of Business ( email )

6363 St. Charles Avenue
New Orleans, LA 70118
United States

HOME PAGE: http://researchforprofit.com

Paper statistics

Downloads
352
Rank
69,775
Abstract Views
1,484