The influence of “offer for sale” by existing shareholders on investors’ reaction in the IPO immediate aftermarket

Business and Economic Horizons Pub Date : 2018-08-16 DOI:10.15208/BEH.2018.56

Norliza Che-Yahya, Ruzita Abdul-Rahim, R. M. Rashid

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引用次数: 13

Abstract

This study investigates the influence of "offer for sale" by existing shareholders on investors’ reaction in the IPO immediate aftermarket. The "offer for sale" is measured by the proportion of shares offered to public from the sale of the existing shareholdings prior to IPO against the total number of shares offered during IPO. The "offer for sale" activity suggests that proceed from the shares sold at an IPO would go into the pocket of the existing shareholders. That is, the proceed does not actually meet the primary goals of the IPO to raise funds for business expansion. IPO firms that go public mainly through "offer for sale" activity are expected to receive less demand during IPO from potential investors as the investors are less optimistic in firms which their shares are offered mostly through "offer for sale" activity relative to firms which their shares are newly issued. Thus, firms which their shares are offered through "offer for sale" activity are predicted to produce poor initial aftermarket return and trading. Using a final sample of 419 Malaysian IPOs issued from January 2000 to December 2015, regression results of this study reveal that firms which their shares are offered highly through "offer for sale" report poor and lower initial aftermarket return and trading volume. The results support the proposition of this study that investors are less optimistic in firms which their shares are offered mostly through "offer for sale" activity.

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现有股东“要约出售”对IPO后市场投资者反应的影响

本研究考察了上市后市场中现有股东的“要约出售”对投资者反应的影响。“出售要约”是根据首次公开募股前出售现有股权向公众发行的股份占首次公开募股期间发行的股份总数的比例来衡量的。“要约出售”活动表明，首次公开募股中出售的股票将进入现有股东的口袋。也就是说，这一过程实际上并没有达到IPO为业务扩张筹集资金的主要目标。主要通过“要约出售”活动上市的IPO公司预计在IPO期间从潜在投资者那里收到的需求会减少，因为相对于新发行股票的公司，投资者对其股票主要通过“出价出售”活动发行的公司不太乐观。因此，通过“要约出售”活动提供股票的公司预计会产生较差的售后市场初始回报和交易。利用2000年1月至2015年12月期间419家马来西亚IPO的最终样本，本研究的回归结果显示，通过“要约出售”获得高报价的公司报告称，其初始售后市场回报率和交易量较差且较低。研究结果支持了这项研究的观点，即投资者对主要通过“要约出售”活动发行股票的公司不太乐观。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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Business and Economic Horizons ECONOMICS-

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期刊介绍： The Business and Economic Horizons (BEH) is an international peer-reviewed journal that publishes high quality theoretical, empirical, and review papers covering the broad spectrum of research in areas of economics, business, management, and finance. The journal aim is to bridge the gap between the theory and the observed data in these constantly developing domains. BEH Editorial Board welcomes the high-quality original research articles and review papers that verify the well-grounded and the emerging theories by employing the econometric, statistical methods or other relevant empirical methods in theoretical and applied economic analysis. BEH does not discriminate articles utilizing the non-mainstream approaches such as experimental research, institutional analysis, other variations of heterodox and developmental economic studies. Therefore, the submissions in any field of micro- and macroeconomics, business ethics, economic policy or finance are appropriate for this journal. We hope, the provided contributions will help to understand the contemporary challenges faced by the private and public sector and will establish an international forum of empirical research.