Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240338 
Year of Publication: 
2020
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 15/2020
Publisher: 
Bank of Finland, Helsinki
Abstract: 
We propose a rationale for why firms often return to the equity market shortly after their initial public offering (IPO). We argue that hard to value firms conduct smaller IPOs, and that they return to the equity market conditional on positive valuation signal from the stock market. Thus, information asymmetry is not a necessary condition for staged financing. We find strong support for these arguments in a sample of 2,143 U.S. IPOs between 1981-2014. Hard to value firms conduct smaller IPOs, and upon positive post-IPO returns, they tend to return to the equity market quickly, following the IPO.
Subjects: 
IPOs
security issuance
sequential financing
JEL: 
G14
G24
G32
Persistent Identifier of the first edition: 
ISBN: 
978-952-323-344-7
Document Type: 
Working Paper

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