Initial Public Offerings: Cfo Perceptions
Posted: 8 Aug 2006
We examine four issues pertaining to IPOs using a survey of 438 CFOs. First, why do firms go public? Second, is CFO sentiment stationary across bear and bull markets? Third, what concerns CFOs about going public? Fourth, do CFO perceptions correlate with returns? Results support funding for growth and liquidity as the primary reasons for IPOs. CFO sentiment is generally stationary in pre- and post-bubble years. Managers are concerned with the direct costs of going public, such as underwriting fees, as well as indirect costs. We find a negative relation between a focus on immediate growth and longterm abnormal returns.
Keywords: IPOs, initial public offerings, equity offering, survey, chief financial officer, CFO, perceptions
JEL Classification: G14, G24, G32, G34
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