Arif Khurshed - Academia.edu (original) (raw)

Papers by Arif Khurshed

Research paper thumbnail of The Rise and Fall of the European New Markets: On the Short and Long-run Performance of High-tech Initial Public Offerings

SSRN Electronic Journal, 2000

Research paper thumbnail of UK institutional shareholding

Research paper thumbnail of Trading by Directors Around the Expiry of Lock-In Agreements in UK IPOs

SSRN Electronic Journal, 2000

Most UK IPOs include lock-in agreements, which prevent the directors and other initial shareholde... more Most UK IPOs include lock-in agreements, which prevent the directors and other initial shareholders from selling their shares for a specified period after the IPO. Using a sample of 94 UK IPOs, we analyse their stock performance around the time of expiry of the lock-in agreement. We also look at the volume and pattern of directors' sales before and after the expiry of the lock-in agreement. We find that the average cumulative abnormal return around the lock-in expiry is negative and is significantly different from zero. However, examining stock performance around the lock-in expiry in the UK is not straightforward, as the expiry dates of two thirds of lock-in agreements are tied in with the announcement or publication of financial figures. This makes it difficult to estimate the expiry date. Also, the abnormal returns around the expiry may be influenced by the information effect of the earnings.

Research paper thumbnail of A Dissection of Bookbuilt IPOs: Subscriptions, Underpricing, and Initial Returns

SSRN Electronic Journal, 2000

... Securities and Exchange Board of India (SEBI)), AP Verma and Anthony Kottackal (SBI Capital M... more ... Securities and Exchange Board of India (SEBI)), AP Verma and Anthony Kottackal (SBI Capital Markets), Vidhu Shekhar and Sunil Gawde (National Stock Exchange of India), Saurabh Vijayvergia, Abhishek Goel and Aseem Goel (DSP Merrill Lynch), Kaushal Shah and Prateek ...

Research paper thumbnail of The Operating and SharePrice Performance of Initial Public Offerings: The UK Experience

SSRN Electronic Journal, 2000

ABSTRACT We study the post-issue operating performance of UK Initial Public Offerings. Using seve... more ABSTRACT We study the post-issue operating performance of UK Initial Public Offerings. Using several measures, we find that the performance of firms going public on the Official List deteriorates significantly after the issue. On the contrary, IPO-firms on the Alternative Investment Market (AIM) use the IPO as springboard for growth without sacrificing their profitability. The AIM is, indeed, the first market where operating performance is not found to be declining after the IPO. The listing on the AIM does not affect significantly the leverage of the firms, but gives the opportunity to raise fresh funds, both at the time of the initial offering and through further (debt or equity) capital raisings. Conversely, the permanent decrease in leverage after the IPO on the Official List characterizes the flotation on this market as a mean to rebalance the firms' capital structure.

Research paper thumbnail of PO Lock-in Agreements in the UK

Journal of Business Finance <html_ent glyph="@amp;" ascii="&"/> Accounting, 2001

When a company offers shares in an initial public offering (IPO), insiders typically enter into a... more When a company offers shares in an initial public offering (IPO), insiders typically enter into a so-called lock-in agreement. 1 A lock-in agreement is an arrangement between the existing shareholders of the issuing firm (managers, directors, employees, venture capitalist and other individual and institutional shareholders) and the underwriter, whereby the shareholders agree not to sell a certain percentage of their holdings for a specified length of time after the IPO. This period is called the lock-in period, and the termlock-in expiry date' ...

Research paper thumbnail of The Strategy of Going Public: How UK Firms Choose Their Listing Contracts

Journal of Business Finance & Accounting, 2006

UK firms going public have a choice between public offers and placings. This choice has important... more UK firms going public have a choice between public offers and placings. This choice has important implications in terms of who bears the risk of the issue failing and of its costs. We find that firms with higher ex ante uncertainty choose a placing contract. Highly reputable sponsors and creditor screening serve as signals of firm quality, enabling such firms to choose a public offer. Large and multinational firms usually choose a public offer whereas there is some evidence that very small issues choose a placing. Finally, the 'hotness' of the IPO market increases the probability of placings.

Research paper thumbnail of IPO Survival in a Reputational Market

Journal of Business Finance & Accounting, 2012

We thank Paul Andre (Associate editor), Michael Brennan, Cecile Carpentier, Alma Hales, Ranko Jel... more We thank Paul Andre (Associate editor), Michael Brennan, Cecile Carpentier, Alma Hales, Ranko Jelic, Tim Jenkinson, Stefano Paleari, Ajai Singh, Norman Strong, Jean-Marc Suret, Nick Weaver and an anonymous referee for their valuable comments and suggestions. We thank Silvio ...

Research paper thumbnail of Why are the French so different from the Germans? Underpricing of IPOs on the Euro New Markets

International Review of Law and Economics, 2009

We study the underpricing of firms listed on the two largest EuroNM stock exchanges, the Neuer Ma... more We study the underpricing of firms listed on the two largest EuroNM stock exchanges, the Neuer Markt of Germany and the Nouveau Marché of France. We find that the high underpricing in these two markets -contrary to the evidence on the US -is not driven by insiders' selling behaviour. However, the large underpricing is caused by the high degree of riskiness of the issuing firms and by the partial adjustment phenomenon of offer prices to compensate institutional investors for the truthful revelation of their demand for the shares. For France, lock-up agreements act as substitutes to underpricing, but not so for Germany. We also explore the reasons for the large difference in underpricing between the German and the French IPOs: German firms are more underpriced because they are riskier, have larger price revisions, have less stringent VC lock-up contracts, and go public mostly during the hot issue period when the general level of underpricing in all IPO markets is substantially higher.

Research paper thumbnail of Multinationality and the performance of IPOs

Applied Financial Economics, 2012

Does multinationality affect the Initial Public Offering (IPO) performance of entrepreneurial fir... more Does multinationality affect the Initial Public Offering (IPO) performance of entrepreneurial firms? Theoretical arguments can be made for a positive effect of multinationality as well as for a negative effect. We examine this question empirically by analysing IPO data for 240 UK firms. We find that multinationality has significant and positive effects on long-run IPO performance. This suggests that the market perceives entrepreneurial firms with multinational activities as possessing unique intangible assets that are indicative of future ...

Research paper thumbnail of The Expiry of Lock-in Agreements of UK IPOs: A Look at the Directors' Trading Activity

Abstract: Most UK IPOs include lock-in agreements, which prevent the directors and other initial ... more Abstract: Most UK IPOs include lock-in agreements, which prevent the directors and other initial shareholders from selling their shares for a specified period after the IPO. Using a sample of 94 UK IPOs, we analyse their stock performance around the time of expiry of the lock-in agreements. We also look at the volume and pattern of directors' sales before and after the expiry of the lock-in agreement. We find that the average cumulative abnormal return around the lock-in expiry is negative and is significantly different from zero. ...

Research paper thumbnail of Explaining the diversity in shareholder lockup agreements

Journal of Financial Intermediation, 2006

This paper investigates whether shareholder lockup agreements in France and Germany mitigate prob... more This paper investigates whether shareholder lockup agreements in France and Germany mitigate problems of agency and asymmetric information. Despite minimum requirements in terms of the length and percentage of shares locked up, lockup agreements are not only highly diverse across firms but also across the different shareholders of a single firm as most firms have different agreements in place for executives, non-executives and venture capitalists. The diversity across firms and types of shareholders can be explained by firm ...

Research paper thumbnail of The Rise and Fall of the European New Markets: On the Short and Long-run Performance of High-tech Initial Public Offerings

SSRN Electronic Journal, 2000

Research paper thumbnail of UK institutional shareholding

Research paper thumbnail of Trading by Directors Around the Expiry of Lock-In Agreements in UK IPOs

SSRN Electronic Journal, 2000

Most UK IPOs include lock-in agreements, which prevent the directors and other initial shareholde... more Most UK IPOs include lock-in agreements, which prevent the directors and other initial shareholders from selling their shares for a specified period after the IPO. Using a sample of 94 UK IPOs, we analyse their stock performance around the time of expiry of the lock-in agreement. We also look at the volume and pattern of directors' sales before and after the expiry of the lock-in agreement. We find that the average cumulative abnormal return around the lock-in expiry is negative and is significantly different from zero. However, examining stock performance around the lock-in expiry in the UK is not straightforward, as the expiry dates of two thirds of lock-in agreements are tied in with the announcement or publication of financial figures. This makes it difficult to estimate the expiry date. Also, the abnormal returns around the expiry may be influenced by the information effect of the earnings.

Research paper thumbnail of A Dissection of Bookbuilt IPOs: Subscriptions, Underpricing, and Initial Returns

SSRN Electronic Journal, 2000

... Securities and Exchange Board of India (SEBI)), AP Verma and Anthony Kottackal (SBI Capital M... more ... Securities and Exchange Board of India (SEBI)), AP Verma and Anthony Kottackal (SBI Capital Markets), Vidhu Shekhar and Sunil Gawde (National Stock Exchange of India), Saurabh Vijayvergia, Abhishek Goel and Aseem Goel (DSP Merrill Lynch), Kaushal Shah and Prateek ...

Research paper thumbnail of The Operating and SharePrice Performance of Initial Public Offerings: The UK Experience

SSRN Electronic Journal, 2000

ABSTRACT We study the post-issue operating performance of UK Initial Public Offerings. Using seve... more ABSTRACT We study the post-issue operating performance of UK Initial Public Offerings. Using several measures, we find that the performance of firms going public on the Official List deteriorates significantly after the issue. On the contrary, IPO-firms on the Alternative Investment Market (AIM) use the IPO as springboard for growth without sacrificing their profitability. The AIM is, indeed, the first market where operating performance is not found to be declining after the IPO. The listing on the AIM does not affect significantly the leverage of the firms, but gives the opportunity to raise fresh funds, both at the time of the initial offering and through further (debt or equity) capital raisings. Conversely, the permanent decrease in leverage after the IPO on the Official List characterizes the flotation on this market as a mean to rebalance the firms&amp;#39; capital structure.

Research paper thumbnail of PO Lock-in Agreements in the UK

Journal of Business Finance <html_ent glyph="@amp;" ascii="&"/> Accounting, 2001

When a company offers shares in an initial public offering (IPO), insiders typically enter into a... more When a company offers shares in an initial public offering (IPO), insiders typically enter into a so-called lock-in agreement. 1 A lock-in agreement is an arrangement between the existing shareholders of the issuing firm (managers, directors, employees, venture capitalist and other individual and institutional shareholders) and the underwriter, whereby the shareholders agree not to sell a certain percentage of their holdings for a specified length of time after the IPO. This period is called the lock-in period, and the termlock-in expiry date' ...

Research paper thumbnail of The Strategy of Going Public: How UK Firms Choose Their Listing Contracts

Journal of Business Finance & Accounting, 2006

UK firms going public have a choice between public offers and placings. This choice has important... more UK firms going public have a choice between public offers and placings. This choice has important implications in terms of who bears the risk of the issue failing and of its costs. We find that firms with higher ex ante uncertainty choose a placing contract. Highly reputable sponsors and creditor screening serve as signals of firm quality, enabling such firms to choose a public offer. Large and multinational firms usually choose a public offer whereas there is some evidence that very small issues choose a placing. Finally, the 'hotness' of the IPO market increases the probability of placings.

Research paper thumbnail of IPO Survival in a Reputational Market

Journal of Business Finance & Accounting, 2012

We thank Paul Andre (Associate editor), Michael Brennan, Cecile Carpentier, Alma Hales, Ranko Jel... more We thank Paul Andre (Associate editor), Michael Brennan, Cecile Carpentier, Alma Hales, Ranko Jelic, Tim Jenkinson, Stefano Paleari, Ajai Singh, Norman Strong, Jean-Marc Suret, Nick Weaver and an anonymous referee for their valuable comments and suggestions. We thank Silvio ...

Research paper thumbnail of Why are the French so different from the Germans? Underpricing of IPOs on the Euro New Markets

International Review of Law and Economics, 2009

We study the underpricing of firms listed on the two largest EuroNM stock exchanges, the Neuer Ma... more We study the underpricing of firms listed on the two largest EuroNM stock exchanges, the Neuer Markt of Germany and the Nouveau Marché of France. We find that the high underpricing in these two markets -contrary to the evidence on the US -is not driven by insiders' selling behaviour. However, the large underpricing is caused by the high degree of riskiness of the issuing firms and by the partial adjustment phenomenon of offer prices to compensate institutional investors for the truthful revelation of their demand for the shares. For France, lock-up agreements act as substitutes to underpricing, but not so for Germany. We also explore the reasons for the large difference in underpricing between the German and the French IPOs: German firms are more underpriced because they are riskier, have larger price revisions, have less stringent VC lock-up contracts, and go public mostly during the hot issue period when the general level of underpricing in all IPO markets is substantially higher.

Research paper thumbnail of Multinationality and the performance of IPOs

Applied Financial Economics, 2012

Does multinationality affect the Initial Public Offering (IPO) performance of entrepreneurial fir... more Does multinationality affect the Initial Public Offering (IPO) performance of entrepreneurial firms? Theoretical arguments can be made for a positive effect of multinationality as well as for a negative effect. We examine this question empirically by analysing IPO data for 240 UK firms. We find that multinationality has significant and positive effects on long-run IPO performance. This suggests that the market perceives entrepreneurial firms with multinational activities as possessing unique intangible assets that are indicative of future ...

Research paper thumbnail of The Expiry of Lock-in Agreements of UK IPOs: A Look at the Directors' Trading Activity

Abstract: Most UK IPOs include lock-in agreements, which prevent the directors and other initial ... more Abstract: Most UK IPOs include lock-in agreements, which prevent the directors and other initial shareholders from selling their shares for a specified period after the IPO. Using a sample of 94 UK IPOs, we analyse their stock performance around the time of expiry of the lock-in agreements. We also look at the volume and pattern of directors' sales before and after the expiry of the lock-in agreement. We find that the average cumulative abnormal return around the lock-in expiry is negative and is significantly different from zero. ...

Research paper thumbnail of Explaining the diversity in shareholder lockup agreements

Journal of Financial Intermediation, 2006

This paper investigates whether shareholder lockup agreements in France and Germany mitigate prob... more This paper investigates whether shareholder lockup agreements in France and Germany mitigate problems of agency and asymmetric information. Despite minimum requirements in terms of the length and percentage of shares locked up, lockup agreements are not only highly diverse across firms but also across the different shareholders of a single firm as most firms have different agreements in place for executives, non-executives and venture capitalists. The diversity across firms and types of shareholders can be explained by firm ...