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Same bed different dream composition of IPO shares and withdrawal decisions in weak market conditions

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  • Pengda Fan

    (Ritsumeikan Asia Pacific University)

  • Kazuo Yamada

    (Nagasaki University)

Abstract

The aim of this paper is to investigate the relationship between the IPO withdrawal decision and the number of secondary shares during the weak stock market conditions. Our results suggest that the withdrawal decision is determined by who plans to sell their shares at the IPO. The findings are as follows. The secondary shares of VCs are positively correlated with an IPO withdrawal decision. The secondary shares of CEOs are only correlated when the CEOs retained ownership is low, and not when CEOs retained ownership is high. These results imply that the VC profit maximization behavior is a key variable in determining IPO withdrawal.

Suggested Citation

  • Pengda Fan & Kazuo Yamada, 2020. "Same bed different dream composition of IPO shares and withdrawal decisions in weak market conditions," Small Business Economics, Springer, vol. 55(4), pages 955-974, December.
    • Handle: RePEc:kap:sbusec:v:55:y:2020:i:4:d:10.1007_s11187-019-00169-2
    DOI: 10.1007/s11187-019-00169-2
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