Journal of Corporate Finance Vol. 49 2018
Initial public offerings on the UK when-issued market
open access
Abstract
We examine the determinants of an IPO firm's decision to trade on a when-issued market and find that better quality firms are more likely to trade on this market. Our ‘what-if’ analysis shows that for companies that choose to have when-issued trading, the actual offer price is almost 26% higher than it would have been had these firms chosen not to trade on this market. We interpret this higher offer price as a ‘rent’ that investors pay to acquire shares of such companies. We also show that the informational accuracy of the UK when-issued market is better than that of continental European when-issued markets.
- DOI
- 10.1016/j.jcorpfin.2017.12.018
- Volume
- 49
- Pages
- 1-14
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib