Second Time Lucky? Withdrawn IPOs That Return to the Market

Authors

Craig G. Dunbar, Ivey School of Business
Stephen R. Foerster, Ivey School of Business

Document Type

Article

Publication Date

3-2008

Volume

87

Issue

3

Journal

Journal of Financial Economics

First Page

610

URL with Digital Object Identifier

https://doi.org/10.1016/j.jfineco.2006.08.007

Last Page

635

Abstract

We investigate issuers withdrawing an IPO (after security regulation filings) that return later for a successful offering. Venture capital backing and reputation of the lead underwriter are key factors in predicting successful return. The possibility of returning has a significant impact on the choice to withdraw and the pricing of offerings that succeed. Our sample of returning IPOs also provides a unique setting to investigate underwriter switching after a withdrawal but before a successful IPO. We find that switching occurs in response to poor bank performance and when switching firms “graduate” to banks that have high industry market shares.

Notes

This is the author accepted version of an article published in Journal of Financial Economics. The final published version can be found at https://doi.org/10.1016/j.jfineco.2006.08.007