Shareholder Lockup Agreements in the European New Markets

We analyse the characteristics of lockup agreements of IPOs on the Neuer Markt and the Nouveau Marche from 1996 to 2000.Even though both markets were part of the same EuroNM network, the characteristics of their lockup agreements are substantially different.Firm characteristics have a major influence on lockup contracts.In addition, shareholder characteristics explain the diversity of contracts within the same firm.Although the French regulator offers two types of minimum lockup contracts, the market perceives a difference between the two contracts as the choice is influenced by the type of the firm and the type of shareholders.Initial public offerings;IPO;lockup agreements;lockup agreements;underpricing;Neuer Markt;Nouveau Marché;EuroNM;asymmetric information

Why are the French so Different from the Germans? Underpricing of IPOs on the Euro New Markets

IPOs on the EuroNMs have shown very high underpricing.The majority of these IPOs possess specific characteristics such as lock-up agreements, venture-capital financing, ownership by the underwriter and over-allotment options.We study how these characteristics influence the underpricing of firms listed on the two largest EuroNM stock exchanges, the Neuer Markt of Germany and the Nouveau Marche of France.We find that the high underpricing in these two markets contrary to the evidence on the US - is not driven by insiders selling behaviour.However, the large underpricing is caused by the high degree of riskiness of the issuing firms and by the partial adjustment phenomenon of offer prices to compensate institutional investors for the truthful revelation of their demand for the shares.In contrast, venture-capital involvement does not affect underpricing.For France, lock-up agreements act as substitutes to underpricing, but not so for Germany.We also explore the reasons for the large difference in underpricing between the German and the French IPOs: German firms are more underpriced because they are more risky, have larger price revisions, have less stringent VC lock-up contracts and mostly go public during the hot issue period of 1999-2000 when the general level of underpricing in all IPO markets is substantially higher.IPOs;underpricing;venture capital;high technology;European new markets;lock-up agreements

The Rise and Fall of the European New Markets: On the Short and Long-Run Performance of High-Tech Initial Public Offerings

initial public offerings;underpricing;long-run underperformance;stock exchange regulation;listing rules

Lock-In Agreements in Venture Capital Backed UK IPOs

This paper examines the impact of venture-capital backing of UK companies issuing shares at flotation on the characteristics of the lock-in agreements entered into by the existing shareholders, and on the abnormal returns realised around the expiry of the directors' lock-in agreements.The study examines the lock-in agreements of a sample of 186 UK IPOs issued during 1992-98. 103 of these companies had venture-capital backing at the IPO.The sample is also broken down into firms classified by industrial sector: of 103 VC backed companies 48 are high-tech, and among the 83 firms without VC backing 33 are high-tech.We find that lock-in agreements in the UK show much more variety in terms of the contractual detail than US agreements.Lock-in periods are particularly long for venture-backed high-tech companies.By contrast, for firms not in the high-tech sector, venture-capital backing appears to reduce the directors' lock-in periods.This suggests that for UK IPOs venture-capital backing does not serve as a substitute for lock-in agreements.Examining the proportion of locked-in directors' shares, we find it to be significantly higher in VC-backed firms as compared to firms without VC backing in the sample of firms not classified as high tech.This suggests that for firms likely to face only moderate information asymmetries (i.e. those not in high-tech industries), venture-capital backing of the IPO is not used as a substitute for, but rather as a complement to, lock-in agreements.The higher proportion of locked-in directors' shares among VC-backed companies (not in the high-tech sector) may be because the underwriters of VC-backed IPOs expect heavy sales by the VCs in the period after the IPO and decide to lock in the directors' shares and in order to limit the downward pressure of the VC's disposals on stock prices.Alternatively, if VCs do not sell out completely in the IPO, as reported by Barry et al. 1990, they may seek to align the directors' interests with their own by locking the directors in.We also examine the share-price performance of IPOs with and without VC backing around the time of the expiry of the lock-in agreements, and find that the CAARs for the VC-backed stocks are lower for most of the short windows around the expiry date, both for the sample as a whole and separately for each industry sector.For the sample of 28 VC-backed stocks, the CAARs are statistically significantly less than zero at the 1% level for the narrow one-to three-day windows around the expiry date.For the VC-backed stocks, the CAARs range from -1.2% to -1.6% (and even to -2% for the 11-day window, but this result is not statistically significant), while the corresponding CAARs for the stocks without VC backing range only from -0.2% to -0.8.initial public offerings;lock-in;high-tech;venture capital;IPO

Nelinearni valovi u magnetiziranoj plazmi – nov pristup

An analysis of nonlinear waves in a low-frequency low-b magnetized plasma is performed in a modified approach. Two different nonlinear equations are deduced, having both solitary-wave-type and kink-type solutions. The solitary wave propagates obliquely to a static magnetic field. It is observed that both the current and magnetic field show the form of solitary and kink structure. Physical relevance of such nonlinear excitations is discussed.Načinili smo analizu nelinearnih valova u niskofrekventnoj magnetiziranoj plazmi niskog β u izmijenjenom pristupu. Izveli smo dvije različite nelinearne jednadžbe. Obje imaju solitonsko i skokovito rješenje. Solitonski se val širi koso u odnosu na smjer statičkog magnetskog polja. Opaža se da i struja i magnetsko polje pokazuju solitonsku i skokovitu strukturu. Raspravlja se fizičko značenje tih nelinearnih uzbuda

Nelinearni valovi u magnetiziranoj plazmi – nov pristup

An analysis of nonlinear waves in a low-frequency low-b magnetized plasma is performed in a modified approach. Two different nonlinear equations are deduced, having both solitary-wave-type and kink-type solutions. The solitary wave propagates obliquely to a static magnetic field. It is observed that both the current and magnetic field show the form of solitary and kink structure. Physical relevance of such nonlinear excitations is discussed.Načinili smo analizu nelinearnih valova u niskofrekventnoj magnetiziranoj plazmi niskog β u izmijenjenom pristupu. Izveli smo dvije različite nelinearne jednadžbe. Obje imaju solitonsko i skokovito rješenje. Solitonski se val širi koso u odnosu na smjer statičkog magnetskog polja. Opaža se da i struja i magnetsko polje pokazuju solitonsku i skokovitu strukturu. Raspravlja se fizičko značenje tih nelinearnih uzbuda

Sentiment Traders & IPO Initial Returns: The Indian Evidence

We use India\u27s unique regulatory design to test sentiment-based models of IPO initial returns. Using a sample of 362 Indian offerings from 2003 to 2014, we find that the traditional measure of IPO underpricing averages 23%. We decompose the traditional underpricing measure into two components: one related to voluntary underpricing by the underwriter and the other component related to the IPO\u27s first-day trading activity. We find minimal levels of voluntary underpricing. However, initial returns on the first day average 14% and are primarily driven by the unmet demand of non-institutional investor groups. Overall, our results support sentiment-based models of IPO initial returns