Abstract
The process of going public in the US is governed by the Securities Act of 1933. Usually, if companies decide to go public, an underwriting bank supports the process. After the due diligence, the offering prospectus is prepared. This document includes general information about the firm, future prospects, the competitive environment, and audited financial statements for the most recent three years. With the prospectus the company and its underwriter(s) promote the issue in road shows.
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Notes
- 1.
Fan (2007), p. 29; Singer (2007), p. 49; Teoh et al. (1998c), pp. 177-178.
- 2.
Lowry/Schwert (2004), p. 5; Lowry/Schwert (2002), pp. 1173-1174.
- 3.
Bradley et al. (2001); Ofek/Richardson (2001), p. 22.
- 4.
DuCharme et al. (2001), p. 370. In primary offerings, the proceeds flow to the company for corporate expansion, for example, whereas in a secondary offering, the proceeds go to the owners for selling their shares. Typically, IPOs combine both methods.
- 5.
Field/Hanka (2001), p. 471.
- 6.
DuCharme et al. (2004), p. 34; Teoh et al. (1998b), p. 1936; Teoh et al. (1998c), pp. 178-179.
- 7.
Brau (2010), pp. 18-19; Pagano et al. (1998), p. 36.
- 8.
Baxter (1967); Modigliani/Miller (1958); Modigliani/Miller (1963); Stiglitz (1969).
- 9.
Pagano et al. (1998).
- 10.
Lerner et al. (2005); Zingales (1995).
- 11.
Black/Gilson (1998).
- 12.
Brau et al. (2010).
- 13.
Ritter (1991).
- 14.
Maksimovic/Pichler (2001); Pagano et al. (1998).
- 15.
Leland/Pyle (1977), p. 371-372; Rock (1986), pp. 188-189.
- 16.
Arthurs et al. (2008), pp. 277-279.
- 17.
See for example Pagano et al. (1998) and Brau (2010, 7).
- 18.
The aspects are primarily intended for US IPOs. However, they are similarly true for IPOs in Europe, although the likelihood of going public and the underlying motivations may differ due to structural, cultural and other differences.
- 19.
Pagano et al. (1998), pp. 36-42; Zingales (1995), p. 425.
- 20.
Mello/Parsons (1998), p. 80-82.
- 21.
Brau/Fawcett (2006), p. 406; Schöber (2008), pp. 44-49.
- 22.
Ibbotson/Jaffe (1975); Ibbotson et al. (1988).
- 23.
Lowry/Schwert (2002); Pastor/Veronesi (2005).
- 24.
Jensen/Meckling (1976), pp. 306-309; Ritter (1987), pp. 271-272; Zingales (1995), p. 425.
- 25.
Pagano/Röell (1998), pp. 188-191.
- 26.
Dong/Michel (2012), p. 2.
- 27.
Bowen et al. (2002); Damodaran (2012); Davis (2002); Hand (2003).
- 28.
Guo et al. (2005); Lévesque et al. (2012).
- 29.
Bassioni et al. (2004), p. 46; Chan/Chan (2004), p. 210.
- 30.
Graham et al. (2005); Fedyk et al. (2012); Joos/Zhdanov (2004).
- 31.
Singer (2007), p. 21.
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Ising, P. (2014). Initial Public Offerings. In: Earnings Accruals and Real Activities Management around Initial Public Offerings. Springer Gabler, Wiesbaden. https://doi.org/10.1007/978-3-658-03794-9_2
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