Latent class analysis of IPOs in the Nordics

We examine how the offer size of initial public offerings (IPOs) and the market return on their issue date are related to the pricing of 314 IPOs issued by firms in Denmark, Finland, Norway and Sweden at the one-day, one-week and four-week horizons using latent class analysis, which is a structural...

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Autores principales:	Mikael Bask, Anton Läck Nätter
Formato:	article
Lenguaje:	EN
Publicado:	Public Library of Science (PLoS) 2021
Materias:	Medicine R Science Q
Acceso en línea:	https://doaj.org/article/ea87cbf8b7a14554bffa12643047f121
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spelling	oai:doaj.org-article:ea87cbf8b7a14554bffa12643047f1212021-11-11T06:44:17ZLatent class analysis of IPOs in the Nordics1932-6203https://doaj.org/article/ea87cbf8b7a14554bffa12643047f1212021-01-01T00:00:00Zhttps://www.ncbi.nlm.nih.gov/pmc/articles/PMC8565723/?tool=EBIhttps://doaj.org/toc/1932-6203We examine how the offer size of initial public offerings (IPOs) and the market return on their issue date are related to the pricing of 314 IPOs issued by firms in Denmark, Finland, Norway and Sweden at the one-day, one-week and four-week horizons using latent class analysis, which is a structural equation methodology. We identify four latent classes at each time horizon, where classes (i)-(ii) include a greater number of IPOs: (i) large-sized and underpriced IPOs; (ii) small-sized and overpriced IPOs; (iii) small-sized and severely underpriced IPOs; and (iv) large-sized IPOs that are overpriced at the one-day horizon but underpriced at the four-week horizon. The market returns are normal in latent classes (i)-(iii) and weak in class (iv). Approximately half of the IPOs in the technology sector are in the latent class with small-sized and overpriced IPOs, and most of the IPOs in the class with small-sized and severely underpriced IPOs are in the healthcare sector. Finally, the underpricing of IPOs is not corrected after one or four weeks of trading. Instead, the mean return and the standard deviation of returns increase with the time horizon.Mikael BaskAnton Läck NätterPublic Library of Science (PLoS)articleMedicineRScienceQENPLoS ONE, Vol 16, Iss 11 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	Medicine R Science Q
spellingShingle	Medicine R Science Q Mikael Bask Anton Läck Nätter Latent class analysis of IPOs in the Nordics
description	We examine how the offer size of initial public offerings (IPOs) and the market return on their issue date are related to the pricing of 314 IPOs issued by firms in Denmark, Finland, Norway and Sweden at the one-day, one-week and four-week horizons using latent class analysis, which is a structural equation methodology. We identify four latent classes at each time horizon, where classes (i)-(ii) include a greater number of IPOs: (i) large-sized and underpriced IPOs; (ii) small-sized and overpriced IPOs; (iii) small-sized and severely underpriced IPOs; and (iv) large-sized IPOs that are overpriced at the one-day horizon but underpriced at the four-week horizon. The market returns are normal in latent classes (i)-(iii) and weak in class (iv). Approximately half of the IPOs in the technology sector are in the latent class with small-sized and overpriced IPOs, and most of the IPOs in the class with small-sized and severely underpriced IPOs are in the healthcare sector. Finally, the underpricing of IPOs is not corrected after one or four weeks of trading. Instead, the mean return and the standard deviation of returns increase with the time horizon.
format	article
author	Mikael Bask Anton Läck Nätter
author_facet	Mikael Bask Anton Läck Nätter
author_sort	Mikael Bask
title	Latent class analysis of IPOs in the Nordics
title_short	Latent class analysis of IPOs in the Nordics
title_full	Latent class analysis of IPOs in the Nordics
title_fullStr	Latent class analysis of IPOs in the Nordics
title_full_unstemmed	Latent class analysis of IPOs in the Nordics
title_sort	latent class analysis of ipos in the nordics
publisher	Public Library of Science (PLoS)
publishDate	2021
url	https://doaj.org/article/ea87cbf8b7a14554bffa12643047f121
work_keys_str_mv	AT mikaelbask latentclassanalysisofiposinthenordics AT antonlacknatter latentclassanalysisofiposinthenordics
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Latent class analysis of IPOs in the Nordics

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