Underprissättning vid börsintroduktion - En kvantitativ analys av underprissättning i olika branscher & segment från år 2008 till och med 2018.

Abstract

Background and problem discussion: An initial public offering is when a private limited company chooses to publish their shares publicly. When this happens, research and history shows that the share rises in price during the first trading day, called underpricing. This leads to the conclusion that the initial subscription price has been too low. In order to develop and contribute with understanding of the phenomenon and show how underpricing may differ between different industries and different segments, the following purpose has been formulated: Purpose: The purpose of the report is to explain how underpricing has performed between 2008 and 2018 on the Stockholm Stock Exchange, with a focus on the companies industries and segments. The report further aims to investigate whether industry or segment correlate with underpricing. Theory: Previous theory in the field explains that the emergence of underpricing depends on information asymmetry between companies and investors, buyers and sellers, and that the size of the underpricing can be explained by institutional factors. Earlier theories such as "Hot/Cold issue market", "Window dressing" and "Winner's curse" are also described in this section. Method: The method used is quantitative data collection of secondary data. The time interval was selected from 2008 through 2018, where all IPOs took place on Sweden's largest stock exchange, Nasdaq Stockholm. The main focus of the data collection method was to add weight to the company's industry, segments and a combination of these, in addition to any interesting data. This has been done through five hypothesis, which are tested. Result: The result gave the sample a number of 75 stock quotes during the time interval where the division between sectors and segments did not give an even distribution. Average underpricing was 9,87%, and market adjusted underpricing was 9,85% with 2015, 2016 and 2017 being the years when the underpricing was at its highest, and Large Cap companies in the pharmaceutical industry had the highest average market adjusted underpricing of 33.58%. Statistical tests show correlation and statistically significant for the Mid segment, as well as segments and industry: Large Pharmaceuticals, Mid Technology, Mid Consumer Services and Small Pharmaceuticals. Analysis and conclusions: The theory states that 70% of all IPO’s are underpriced. This study resulted in 76% of the sample being underpriced. The amount of asymmetric information plays a major role in the underpricing. For the companies, an important thing is to find a balance within how much money they should leave on the table, and as an investor, the an important thing is to collect as much information as possible, only then can one get a head start and increase their odds of making positive returns on IPOs. The conclusion is that underpricing does happen at the Stockholm Stock Exchange between 2008 and 2018, and that there is a correlation between segment, as well as industry and segment.