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Journal of Financial Economics Vol. 75 No. 1 2005

The timing of initial public offerings

Simon Benninga1,2; Mark Helmantel3; Oded Sarig4,2

1 Tel Aviv University · 2 University of Pennsylvania · 3 University of Groningen · 4 Reichman University

open access

Abstract

We study the dynamics of IPOs by examining the tradeoff between an entrepreneur's private benefits, which are lost whenever the firm is publicly traded, and the gains from diversification. We characterize the timing dimension of the decision to go public and its impact on firm value and the evolution of firm risk over time. By endogenizing the timing of the decision to go public, we explain the clustering of IPOs and buyouts in time, the industry concentration of IPO waves, the high incidence of reprivatization of recent IPOs, and the long-run underperformance of recently issued stock relative to the shares of longer-listed companies.

DOI
10.1016/j.jfineco.2003.04.002
Volume
75
Issue
1
Pages
115-132
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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