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Second time lucky? Withdrawn IPOs that return to the market

Author

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  • Dunbar, Craig G.
  • Foerster, Stephen R.

Abstract

We investigate issuers withdrawing an IPO (after security regulation filings) that return later for a successful offering. Venture capital backing and reputation of the lead underwriter are key factors in predicting successful return. The possibility of returning has a significant impact on the decision to withdraw and the pricing of offerings that succeed. Our sample of returning IPOs also provides a unique setting to investigate underwriter switching after a withdrawal but before a successful IPO. We find that switching occurs in response to poor bank performance and when switching firms "graduate" to banks that have high industry market shares.

Suggested Citation

  • Dunbar, Craig G. & Foerster, Stephen R., 2008. "Second time lucky? Withdrawn IPOs that return to the market," Journal of Financial Economics, Elsevier, vol. 87(3), pages 610-635, March.
    • Handle: RePEc:eee:jfinec:v:87:y:2008:i:3:p:610-635
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    References listed on IDEAS

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