Browsing by Subject "Underpricing"

Now showing 1 - 3 of 3

Open Access
Determinants of ICO success and post-ICO performance
(Borsa Istanbul Anonim Sirketi, 2022-10-20) Aslan, Aylin; Ahmet, Şensoy; Akdeniz, Levent
Initial coin offerings (ICOs) have emerged as an alternative way of raising funds for entrepreneurial ventures to develop a new project or product. In this study, a comprehensive analysis is conducted on the determinants of ICO success and aftermarket performance of ICOs. Our evidence suggests that ICOs with higher ratings, shorter planned token sale duration, smaller share for token sale, larger number of experts and more members in the developing team have a greater likelihood of success and raising more funds. We also show that offer price and market sentiment play a major role in explaining longer term post-ICO performance. Yet, key to a successful ICO and post-ICO performance differ between boom vs bust periods in the cryptocurrency markets.
Open Access
The link between IPO underpricing and trading volume: evidence from the Istanbul stock exchange
(Pepperdine University * Graziadio School of Business and Management, 2006) Yüksel, Aydin; Yüksel, Asli
Recent evidence from U.S. markets shows that IPO underpricing is associated with high liquidity for issuing firms. One explanation given for this link is that IPO firms simultaneously decide on share retention and underpricing to maximize aftermarket liquidity. We use data from the Istanbul Stock Exchange (ISE) to provide international evidence. Our results do not support the argument that IPO firms use underpricing as a tool to make up the reduction in liquidity caused by higher share retention. We report that there is an asymmetric relationship between underpricing and trading volume in the short run. However, the positive link between short term volume and long term volume, which is shown to exist in U.S. markets, is missing in the ISE. Based on the explanations in prior research, we argue that the lack of persistency in initial broad ownership and/or investor interest may be the reason for the missing link.
Open Access
Price performance of initial public offerings in Istanbul Stock Exchange
(1996) Öztop, İbrahim Halil
Tliis study aims at investigating the price behavior of initial public offerings (IPOs) in Istanbul Stock Exchange (ISE) during 1994 and 1995 in the short- and medium-term. The study is also devoted to the structure, pricing methods, timing, advantages and disadvantages of IPOs and the existing regulatory environment. The existence of significant abnormal positive returns of new issues on the first and fifth trading days is the proof of underpricing. However, no significant excess returns are observed for the second and third week following the initial trading. The absence of significant abnormal initial returns in the IPO market in ISE during the same period suggests that new issues follow the general market movement. On the first and third month after the initial trading, the IPOs are overpriced since there exist significant abnormal negative initial returns. The observed high variability on average returns indicates that there might be some stocks that are underpriced while there might be some stocks that are overpriced. Investors purchasing new issues at the initial offering earn positive abnormal returns in the early aftermarket period. IPOs are profitable investments in the short-term (until the fifth trading day), but perform quite poorly over longer periods (after the first month following the initial trading date).