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The Impact Of Insider Ownership Stake Changes At The Ipo And Earnings Management On Post Ipo Operating Performance
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Book Synopsis The Impact of Insider Ownership Stake Changes at the IPO and Earnings Management on Post-IPO Operating Performance by : Alex Leum Han
Download or read book The Impact of Insider Ownership Stake Changes at the IPO and Earnings Management on Post-IPO Operating Performance written by Alex Leum Han and published by . This book was released on 2010 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: Past academic research reports that post-IPO operating performance can be signaled through or explained by company characteristics in a period immediately preceding or following the IPO. This paper examines whether post-IPO operating performance is correlated with earnings management activities immediately preceding and following the IPO, insider ownership retention rates after the IPO, and percentage of insider ownership changes at the IPO. I also test whether aggressive earnings managers experience worse operating performance measured by operating income over total assets than conservative earnings managers. The results from various regression analyses and t-tests in this paper show that earnings management activities immediately preceding and following the IPO and insider ownership retention rates are not correlated with post-IPO operating performance. However, this paper reports a statistically negative relationship between percentage of insider ownership changes at the IPO and post-IPO operating performance in the issue year.
Book Synopsis Ownership Pre- and Post- IPOs and Operating Performance of Italian Firms by : Francesca Scribano
Download or read book Ownership Pre- and Post- IPOs and Operating Performance of Italian Firms written by Francesca Scribano and published by . This book was released on 2015 with total page 41 pages. Available in PDF, EPUB and Kindle. Book excerpt: Evidence shows that, after an IPO, firms usually report a decline in operating performance. This result is confirmed also for the Italian market. In this paper we investigate if this deterioration is explained by the change in ownership following IPO. In particular, we take into consideration two major dimensions of ownership: a quantitative one, indicating ownership concentration and represented by the stake held by top shareholders, and a qualitative one, about the type of shareholder and relative to the presence of private equity firm both before and after the IPO. The main hypotheses question if there are positive relationships between operating performance and the following dimensions: (i) the stake held by top 3 shareholders before IPO; (ii) its change following IPO; (iii) the presence of private equity firm before IPO; (iv) the presence of private equity firm after IPO. Interestingly, we find that ownership structure positively influences operating performance in the years before IPO, but this is not verified in the years after the IPO, although, in the sample, the relationships are all verified. This is an interesting finding of the paper, which should need further investigation.
Book Synopsis The Impact of Institutional Ownership and Board Structure on Earnings Management and Acquisition Performance of S&P 500 Index Firms Around Their Addition to the Index and an Experimental Approach to Buyer's Brokerage by : Muhammed Abdullah Sahin
Download or read book The Impact of Institutional Ownership and Board Structure on Earnings Management and Acquisition Performance of S&P 500 Index Firms Around Their Addition to the Index and an Experimental Approach to Buyer's Brokerage written by Muhammed Abdullah Sahin and published by . This book was released on 2010 with total page 296 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Impact of Managerial Ownership on Operational Performance of IPO Firms by : Adel Boubaker
Download or read book Impact of Managerial Ownership on Operational Performance of IPO Firms written by Adel Boubaker and published by . This book was released on 2014 with total page 17 pages. Available in PDF, EPUB and Kindle. Book excerpt: The study investigates the change in performance of French public firms post to their Initial Public Offerings (IPOs) and its relationship with the changes in the managerial ownership around the time firms do their IPOs. Tests are conducted on a sample of 65 French companies placed on the stock market over the period 2000-2006. The majority of our results show there is a significant negative relation between post-IPO change in performance and equity retention by the managerial ownership. Indeed, several results are opposed to the predictions resulting from the assumption of agency but contribute to retain the assumption of the timing.
Book Synopsis Ownership Structure and Operating Performance of IPOs in India by : Shikha Bhatia
Download or read book Ownership Structure and Operating Performance of IPOs in India written by Shikha Bhatia and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The anomalous behavior of Initial Public Offerings (IPOs) has been extensively researched and debated. Numerous studies have documented stock price and operating underperformance of IPOs and suggested several reasons like earnings management, timing of issues, agency theory, etc., as causing such decline in post-issue performance. This study attempts to examine the operating performance of IPOs in India for a period of five years subsequent to the issue. It specifically seeks to analyze the post-issue operating performance relative to pre-issue levels and to determine the relationship between ownership retained by the promoters and operating performance of issuing firms.
Book Synopsis The Post-Issue Operating Performance of IPO Firms by : Bharat A. Jain
Download or read book The Post-Issue Operating Performance of IPO Firms written by Bharat A. Jain and published by . This book was released on 2000 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the change in operating performance of firms as they make the transition from private to public ownership. It documents a significant decline in operating performance subsequent to the initial public offering (IPO). Additionally, it finds a significant positive relation between post-IPO operating performance and equity retention by the original entrepreneurs but does not find any relation between post-IPO operating performance and the level of initial underpricing. Post-Issue declines in the market-to- book ratio, P/E ratio and the earnings per share are also documented.
Book Synopsis The Effect of Shareholder Rights and Insider Ownership on Earnings Management by : Henry He Huang
Download or read book The Effect of Shareholder Rights and Insider Ownership on Earnings Management written by Henry He Huang and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines whether shareholder rights, which enable shareholders to replace managers, can constrain earnings management and whether this effect is conditional on the level of insider ownership. Using the comprehensive shareholder rights measure constructed by Gompers, Ishii, and Metrick (2003), we find that firms with stronger shareholder rights are associated with less income-increasing discretionary accruals, suggesting that stronger shareholder rights deter managers from reporting aggressive earnings. More importantly, we investigate whether this association is conditional on the level of insider ownership. If insider ownership introduces managerial entrenchment, managers with higher ownership would be insulated from shareholder discipline. Consistent with this entrenchment theory, we find that the association between shareholder rights and earnings management becomes insignificant in the presence of higher levels of insider ownership. Shareholder rights are negatively associated with earnings management only when insider ownership is low. Our results indicate that the disciplinary effect of shareholder rights can be attenuated by high levels of insider ownership.
Book Synopsis Ownership and Operating Performance of Chinese Ipos by : Changyun Wang
Download or read book Ownership and Operating Performance of Chinese Ipos written by Changyun Wang and published by . This book was released on 2004 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine changes in operating performance of Chinese listed companies around their initial public offerings, and focus on the effect of ownership and ownership concentration on IPO performance changes. We document a sharp decline in post-issue operating performance of IPO firms. We also find that neither state ownership nor concentration of ownership is associated with performance changes, but there is a curvilinear relation between legal-entity ownership and performance changes and between concentration of non-state ownership and performance changes. Our results are robust to different performance measures and industry adjustments. These findings suggest that agency conflicts, management entrenchment, and large shareholders' expropriation co-exist to influence Chinese IPO performance, and the beneficial and detrimental effects of state shareholdings tend to offset each other.
Book Synopsis Regulations, Earnings Management, and Post-IPO Performance by : Jennifer L. Kao
Download or read book Regulations, Earnings Management, and Post-IPO Performance written by Jennifer L. Kao and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this study, we examine whether government regulatory initiatives in China involving IPO by SOEs may have contributed to opportunistic behaviors by the issuer. We focus on two sets of IPO regulations issued between January 1, 1996 and February 11, 1999: pricing regulations, which stipulate that IPO prices be a function of accounting performance, and penalty regulations, which penalize IPO firms for overly optimistic forecasts. We find that IPO firms that report better pricing-period accounting performance have larger declines in post-IPO profitability, lower first-day stock returns and worse long-run post-IPO stock performance. Furthermore, IPO firms that make overoptimistic forecasts also have lower first-day returns and worse post-IPO stock performance. Using non-core earnings as the proxy for earnings management, we document some evidence that IPO firms that report higher pricing-period accounting performance have engaged in more income-increasing earnings management. Hence, pricing regulations may have induced IPO firms to inflate pricing-period earnings and affect the post-IPO performance negatively. On the other hand, penalty regulations have deterred IPO firms from making overoptimistic earnings forecast and therefore have a positive impact on the behavior of IPO firms.
Book Synopsis Insider Retention and Long-run Performance in German and UK IPOs by : Marc Goergen
Download or read book Insider Retention and Long-run Performance in German and UK IPOs written by Marc Goergen and published by . This book was released on 2000 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Earnings management in IPO lockup and insider trading by : 黃志仁 (金融)
Download or read book Earnings management in IPO lockup and insider trading written by 黃志仁 (金融) and published by . This book was released on 2008 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Relationship between the Changes in Ownership and Performance of Indian Firms Around IPO by : Manas Mayur
Download or read book Relationship between the Changes in Ownership and Performance of Indian Firms Around IPO written by Manas Mayur and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The study investigates the change in performance of Indian public firms post to their Initial Public Offerings (IPOs) and its relationship with the changes in the insiders' ownership around the time firms do their IPOs. A three step methodology is followed. First, the pre-IPO performance of a sample of Indian publicly listed firms is compared with their post-IPO performance. Second, a univariate analysis is carried out wherein the median of post-IPO performance of sampled firms having low level of insiders' ownership in the post-IPO period is compared with the median of post-IPO performance of sampled firms having high level of insiders' ownership in the post-IPO period. Finally, multivariate analysis is done in form of a panel data regression model to assess the effect of changes in the insiders' ownership around the time firms do their IPOs on the post-IPO performance of the firms. It is found that: (a) performance of entire sample of publicly listed Indian firms deteriorates significantly post to their IPOs; and (b) firms having low levels of insiders' ownership in the post-IPO period experienced the greatest decrease in their post-IPO performance. It is concluded that the changes in the level of insiders' ownership are inversely proportional to changes in performance of firms around the time firms do their IPOs.
Book Synopsis Earnings Management and Initial Public Offerings by : Brian John Adams
Download or read book Earnings Management and Initial Public Offerings written by Brian John Adams and published by . This book was released on 2014 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: In a typical IPO, insiders are “net sellers” of IPO shares; however, in a demutualizing thrift, insiders are “net buyers” of IPO shares. Using a sample of mutual depository IPOs, we find evidence consistent with earnings management prior to the conversion of mutual thrifts. We find on average that mutuals report lower ROA and increased loan loss provisions and loan loss reserves in the period prior to the demutualization. Using a two-stage approach, we also find that the level of discretionary loan loss provisions and discretionary reserves are positively related to both the level of insider participation in the IPO and the first-day returns to investors. Our results are consistent with management of mutual thrifts benefiting at the conversion from reduced pre-IPO earnings and book equity resulting from earnings management.
Book Synopsis Earnings Management and Long-run Post-issue Performance of IPOs in India by : Mamta Dhanda
Download or read book Earnings Management and Long-run Post-issue Performance of IPOs in India written by Mamta Dhanda and published by . This book was released on 2020 with total page 19 pages. Available in PDF, EPUB and Kindle. Book excerpt: The controversies surrounding accounting figures bring forth the downgraded quality of financial statements in India. Opportunistic management of earnings at the cost of stakeholders' interest requires prompt regulatory measure as they may become grave in high profile corporate events like mergers and public issues. Focusing on one of the most important mega events of initial public offerings (IPOs) the present study evaluates the accounting figure of IPOs that came out during April 2010 to March 2013. The study measures pre and post issue earnings management for a time span of 11 years from April 2008 to March 2019 and post issue long run earnings and stock performance using Modified Jones Model (1995) for a time span of seven years including issue year and six post issue years. The study provides evidence of earnings management by Indian IPO firms and post issue earnings and stock underperformance due to reversal of discretionary current accruals of issue year. The study emphasizes on better monitoring and regulatory environment and precise definition of accounting choices to control managed accounts to avoid frequent fraud incidents.
Book Synopsis The Impact of Credit Ratings and CEOs' Work Experience on Earnings Management and Post-issue Performance of U.S. IPOs by : Hang Minh Pham
Download or read book The Impact of Credit Ratings and CEOs' Work Experience on Earnings Management and Post-issue Performance of U.S. IPOs written by Hang Minh Pham and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Insider R&D Manipulation Around IPOs by : Robert M. Hull
Download or read book Insider R&D Manipulation Around IPOs written by Robert M. Hull and published by . This book was released on 2011 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine 447 IPOs from 1997-2005. While our regression model builds on prior research, it uses a more inclusive dependent R&D variable, a wider range of insider variables ("net" selling, changes in ownership proportions, and a five percent group), and independent variables designed to test the earnings fixation hypothesis. We find that reduced R&D spending is associated with insider behavior related to the lowering of ownership proportions and greater net share selling. This finding strengthens prior IPO research conducted on a smaller sample and an earlier period that did not cover both a bubble and a non-bubble period. Our insider results are driven by directors and officers and not other insiders who own give percent or more of shares. Because our insider variables are unrelated to changes in capital expenditures, our findings support the earnings fixation hypothesis that posits insiders reduce R&D to inflate earnings when it enhances their wealth.
Book Synopsis Operating Performance of PE-backed IPOs by : Fotios Diamantis
Download or read book Operating Performance of PE-backed IPOs written by Fotios Diamantis and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Using data from Thompson One, Compustat and Bloomberg, this paper examines the relationship between Buyout and Venture Capital backing and accounting measured post-IPO operating performance of issue companies. The paper also compares this performance with companies that undergo IPOs but are not backed by financial sponsors. The sample consists of 1,790 IPOs in the US that breaks down to 816 Sponsor-backed and 974 Not-backed IPOs from 1998 to 2014. The results indicate that Buyout firms are significantly larger in size, more profitable, more efficient and carry larger amounts of debts as a percentage of assets before and after the IPO comparing to other IPOs. To the contrary, VC-backed firms are less profitable, less efficient and less indebted than the group of Not-backed firms. With the use of cross-section regressions, we find a positive relationship between PE certification and post-IPO performance changes that is only consistently significant in the long-term and in normal markets periods.
