Selection of a stock exchange for an IPO of a technology-based company
DOI:
https://doi.org/10.21638/spbu05.2019.305Abstract
The article examines factors influencing the choice of exchange platform used by the manage-ment of innovation-oriented companies, such as depth, accessibility, efficiency, and stability, as well as the level of underestimation of the shares of new issuers during an IPO. The au-thors formulate a series of hypotheses and show that the level of the depth of a site is directly dependent on the degree of development of the country's financial institutions for all types of sites (main and alternative), and on the level of trading intensity (but only for alternative ones). It was discovered that alternative sites of countries belonging to the Anglo-Saxon fi-nancial system are, on average, less concentrated than corresponding major exchange sectors. Regarding the underestimation of shares, it was shown that on the first day of trading, this is higher among Russian companies in the high-tech industry. A site selection algorithm is pro-posed that can be applied by managers of Russian innovation-oriented companies for making IPO decisions. This algorithm combines previously analyzed quantitative factors and a num-ber of qualitative factors, which include the level of marketing and organizational support for new issuers, level of financial support for new issuers, and degree of company readiness to place shares on a specific site. The advantage is to take into account a wider set of factors that influence the decision to choose a site for an IPO of an innovation-oriented company and to consider opportunities offered by alternative stock exchanges for such issuers.
Keywords:
technology-based companies, initial public offering, IPO, junior stock, junior stock exchanges, underpricing of shares, revaluation of shares
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References
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Published
2019-12-06
How to Cite
Мотовилов, О. В., Самылов, И. О., & Сеидова, М. Ш. (2019). Selection of a stock exchange for an IPO of a technology-based company. St Petersburg University Journal of Economic Studies, 35(3), 419–447. https://doi.org/10.21638/spbu05.2019.305
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Russia and economy of emerging markets
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Articles of the St Petersburg University Journal of Economic Studies are open access distributed under the terms of the License Agreement with Saint Petersburg State University, which permits to the authors unrestricted distribution and self-archiving free of charge.
