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Author: Thomas J. Chemmanur
Publisher:
ISBN:
Category :
Languages : en
Pages : 49
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Book Description
Practitioners have noted that firms tend to increase their product market advertising prior to an IPO or a seasoned equity issue. Further, recent empirical evidence indicates that firms with a greater level of product market advertising have lower bid-ask spreads and a larger number of both individual and institutional investors in their equity. We develop a theoretical model of the interaction between a firm's product market advertising and its corporate financing decisions in the above context. We consider a firm which faces asymmetric information in both the product and the financial market (about the quality of its products and the intrinsic value of its projects) and which needs to raise external financing to fund its growth opportunity (new project). Any product market advertising undertaken by the firm is visible in the financial market as well. We show that, in equilibrium, the firm uses a combination of product market advertising, IPO underpricing, and underfinancing (raising a smaller amount of external capital than the full information optimum) to convey its true product quality and the intrinsic value of its projects to consumers and investors. Our model has several implications for IPO underpricing and product market advertising. Two of these predictions are as follows. First, firms will choose a higher level of product market advertising when they are planning to issue new equity or other information-sensitive securities, compared to situations where they have no immediate plans to sell such securities. Second, product market advertising and IPO underpricing are substitutes for a firm going public. The empirical evidence supports these two predictions: First, firms indeed increase their product market advertising in their IPO year relative to a benchmark year two years before their IPO. Further, we find that, in the five-year span around the IPO year (i.e., the IPO year, and the two years before and after the IPO year), the peak advertising level is reached in the IPO year. Second, the extent of underpricing is smaller as the level of product market advertising is greater.
Author: Thomas J. Chemmanur
Publisher:
ISBN:
Category :
Languages : en
Pages : 49
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Book Description
Practitioners have noted that firms tend to increase their product market advertising prior to an IPO or a seasoned equity issue. Further, recent empirical evidence indicates that firms with a greater level of product market advertising have lower bid-ask spreads and a larger number of both individual and institutional investors in their equity. We develop a theoretical model of the interaction between a firm's product market advertising and its corporate financing decisions in the above context. We consider a firm which faces asymmetric information in both the product and the financial market (about the quality of its products and the intrinsic value of its projects) and which needs to raise external financing to fund its growth opportunity (new project). Any product market advertising undertaken by the firm is visible in the financial market as well. We show that, in equilibrium, the firm uses a combination of product market advertising, IPO underpricing, and underfinancing (raising a smaller amount of external capital than the full information optimum) to convey its true product quality and the intrinsic value of its projects to consumers and investors. Our model has several implications for IPO underpricing and product market advertising. Two of these predictions are as follows. First, firms will choose a higher level of product market advertising when they are planning to issue new equity or other information-sensitive securities, compared to situations where they have no immediate plans to sell such securities. Second, product market advertising and IPO underpricing are substitutes for a firm going public. The empirical evidence supports these two predictions: First, firms indeed increase their product market advertising in their IPO year relative to a benchmark year two years before their IPO. Further, we find that, in the five-year span around the IPO year (i.e., the IPO year, and the two years before and after the IPO year), the peak advertising level is reached in the IPO year. Second, the extent of underpricing is smaller as the level of product market advertising is greater.
Author: Michelle Lowry
Publisher:
ISBN: 9781680833416
Category : Electronic books
Languages : en
Pages : 166
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Book Description
The purpose of this monograph is to provide an overview of the IPO literature since 2000. The fewer numbers of companies going public in recent years has raised many questions regarding the IPO process, in both academic and regulatory circles. As we all strive to understand these changes in the market, it is especially important to understand the dynamics underlying the IPO process. If the process of going public is too costly or the IPO mechanism is plagued by too many conflicts of interest among the various intermediaries, then private companies may rationally choose other methods of raising capital. In a related vein, it is imperative that new regulations not be based on research focusing solely on large, more mature firms. Newly public firms have unique characteristics, and an increased understanding of such issues will contribute positively to well-functioning public markets and further growth of the entrepreneurial sector. We also provide a detailed guide to researchers on how to obtain a research-quality sample of IPOs, from standard data sources. Related to this, we tabulate important corrections to these standard data sources.
Author: Murad Harasheh
Publisher:
ISBN:
Category :
Languages : en
Pages : 26
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Book Description
The study aims at investigating the relationship between Initial Public Offerings (IPOs) variables mainly underpricing on one hand, and the brand value measures on the other. Our final data set is 104 international brand companies. We implement empirical approach using hierarchal OLS regression and descriptive statistics. We show that underpricing is positively related to brand value which emphasizes the marketing role of going public and underpricing in enhancing brand equity through the product market, which additionally confirms some information asymmetry models. We also show that on average brand companies had not been recognized as brands at the IPO time. Moreover, we show the positive role of private equity in enhancing brand value, additionally, the non-linear association between underpricing and brand value is not evident. Finally, we draw some policy implication and suggestions for future research.
Author: Shankar Ganesan
Publisher: Edward Elgar Publishing
ISBN: 1849806047
Category : Business & Economics
Languages : en
Pages : 337
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Book Description
Many organizations have found that the value to business operations and financial performance created by the marketing function has become very important. The need to demonstrate this importance has also become clear. Top managers are constantly challenging marketers to document marketing's contribution to the bottom-line and link marketing investments and assets to metrics that matter to them. This Handbook relates marketing actions to various types of risk and return metrics that are typically used in the domain of finance. It provides current knowledge of this marketing-finance interface in a single, authoritative volume and brings together new cutting-edge research by established marketing scholars on a range of topics in the area. The research in the marketing-finance interface spans tactical and strategic marketing actions related to the creation, communication, delivery and appropriation of the value proposition. The chapters, specifically written for this Handbook, draw on theoretical developments in economics, accounting, finance, psychology and cutting-edge statistical and econometric approaches. Academics and doctoral students in marketing, accounting, finance, and applied economics, along with marketing and brand strategy-focused business practitioners and consultants, will appreciate the state-of-the-art research herein.
Author: Greg N. Gregoriou
Publisher: Elsevier
ISBN: 0080461670
Category : Business & Economics
Languages : en
Pages : 463
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Book Description
After the cooling off of IPOs since the dot com bubble, Google has rekindled the fire for IPOs. This IPO reader contains new articles exclusive to this reader by leading academics from around the world dealing with quantitative and qualitative analyses of this increasingly popular and important area of finance. Articles address new methods of IPO performance, international IPOs, IPO evaluation, IPO underwriting, evaluation and bookbuilding. Although numerous articles are technical in nature, with econometric and statistical models, particular attention has been directed towards the understanding and the applicability of the results as well as theoretical development in this area. This reader will assist researchers, academics, and graduate students to further understand the latest research on IPOs. *Interest in IPOs is increasing again after the Google IPO, and IPOs are up significantly from last year *Chapters by well known academics provide an international perspective, describing research results from IPO data in countries spanning the globe *Research is based on real results from IPO data collected over the past 5-7 years
Author: John W. Kensinger
Publisher: Emerald Group Publishing
ISBN: 1786351552
Category : Business & Economics
Languages : en
Pages : 375
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Book Description
Research in Finance Vol 32 reflects the current and primary issues in financial markets and to applying financial modeling in emerging markets.
Author: George J. Papaioannou
Publisher: Academic Press
ISBN: 0128032839
Category : Business & Economics
Languages : en
Pages : 334
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Book Description
Underwriting Services and the New Issues Market integrates practice, theory and evidence from the global underwriting industry to present a comprehensive description and analysis of underwriting practices. After covering the regulation and mechanics of the underwriting process, it considers economic topics such as underwriting costs and compensation, the pricing of new issues, the stock price and operating performance of issuing firms, the evaluation of new issue decisions, and an analysis of the many choices issuers face in structuring new issues. Unlike other books, it systematically develops a critical perspective about underwriting practices, both in the U.S. and international markets, and with a level of detail unavailable elsewhere and an approach that reveals how financial institutions deliver underwriting services. Underwriting Services and the New Issues Market delivers an innovative and long overdue look at security issuance. Foreword by Frank Fabozzi Covers underwriting contracts and arrangements on pricing and costs Focuses on the financial consequences of the issuance decision for the firm Describes and evaluates decisions regarding the features and structure of new security offerings.
Author: Janet Kiholm Smith
Publisher: Stanford University Press
ISBN: 150360912X
Category : Business & Economics
Languages : en
Pages : 767
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Book Description
Entrepreneurial Finance: Venture Capital, Deal Structure & Valuation, Second Edition illustrates how the theory and methods of finance and economics can be used to guide strategic decision-making. This text prepares readers for a variety of situations that confront stakeholders in the rapidly evolving fields of entrepreneurial finance and venture capital, outlining ways to think from the investor's and entrepreneur's perspectives. Readers will find a unique and direct focus on value creation as the objective of each strategic and financial choice. The authors specifically address the influences of risk and uncertainty on new venture success and investment performance, devoting substantial attention to methods of financial modeling and contract design. Finally, they provide a comprehensive survey of approaches to new venture valuation, with an emphasis on applications. The second edition is thoroughly revised to reflect new data, research, and changes in practice in this fast-moving field. It has an increased focus on venture capital, while maintaining its hallmark coverage of the financial aspects of entrepreneurship. Updates throughout address technological changes that have the potential to dramatically change the landscape for finance, such as recent innovations in contracting for early-stage ventures, artificial intelligence and machine learning, and Internet connectivity. Lastly, the book offers a companion website with a useful suite of resources for students and instructors alike, including spreadsheets, templates, simulation applications, and interactive cases and tutorials.
Author: Dan Olsen
Publisher: John Wiley & Sons
ISBN: 1118961021
Category : Business & Economics
Languages : en
Pages : 336
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Book Description
The missing manual on how to apply Lean Startup to build products that customers love The Lean Product Playbook is a practical guide to building products that customers love. Whether you work at a startup or a large, established company, we all know that building great products is hard. Most new products fail. This book helps improve your chances of building successful products through clear, step-by-step guidance and advice. The Lean Startup movement has contributed new and valuable ideas about product development and has generated lots of excitement. However, many companies have yet to successfully adopt Lean thinking. Despite their enthusiasm and familiarity with the high-level concepts, many teams run into challenges trying to adopt Lean because they feel like they lack specific guidance on what exactly they should be doing. If you are interested in Lean Startup principles and want to apply them to develop winning products, this book is for you. This book describes the Lean Product Process: a repeatable, easy-to-follow methodology for iterating your way to product-market fit. It walks you through how to: Determine your target customers Identify underserved customer needs Create a winning product strategy Decide on your Minimum Viable Product (MVP) Design your MVP prototype Test your MVP with customers Iterate rapidly to achieve product-market fit This book was written by entrepreneur and Lean product expert Dan Olsen whose experience spans product management, UX design, coding, analytics, and marketing across a variety of products. As a hands-on consultant, he refined and applied the advice in this book as he helped many companies improve their product process and build great products. His clients include Facebook, Box, Hightail, Epocrates, and Medallia. Entrepreneurs, executives, product managers, designers, developers, marketers, analysts and anyone who is passionate about building great products will find The Lean Product Playbook an indispensable, hands-on resource.
Author: Lawrence J. Gitman
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 1455
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Book Description
Introduction to Business covers the scope and sequence of most introductory business courses. The book provides detailed explanations in the context of core themes such as customer satisfaction, ethics, entrepreneurship, global business, and managing change. Introduction to Business includes hundreds of current business examples from a range of industries and geographic locations, which feature a variety of individuals. The outcome is a balanced approach to the theory and application of business concepts, with attention to the knowledge and skills necessary for student success in this course and beyond. This is an adaptation of Introduction to Business by OpenStax. You can access the textbook as pdf for free at openstax.org. Minor editorial changes were made to ensure a better ebook reading experience. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution 4.0 International License.
