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Market Volatility and IPO Filing Activity

Author

Listed:
  • Walid Y. Busaba

    (Ivey Business School, Western University, Canada, 1255 Western Road, London, ON N6G 0N1, Canada)

  • Yun Li

    (Bank of Montreal Financial Group, 100 King Street West, Toronto, ON M5X 1A1 Canada)

  • Guorong Yang

    (Bank of Montreal Financial Group, 100 King Street West, Toronto, ON M5X 1A1 Canada)

Abstract

The initial public offering (IPO) filing volume is positively related to changes in market volatility, especially when market returns are at ‘normal’ levels. This is consistent with the view that filing with the Securities and Exchange Commission (SEC) gives would-be issuers an ‘option’ on market valuations. Creating this option is attractive not only when market valuations rise but also when volatility increases, and the effect of volatility is more pronounced when market returns are neither high nor low. We therefore identify a distinct type of ‘window of opportunity’ for firms attempting to go public, characterized not particularly by strong stock valuations but by increased volatility in valuations.

Suggested Citation

  • Walid Y. Busaba & Yun Li & Guorong Yang, 2015. "Market Volatility and IPO Filing Activity," Quarterly Journal of Finance (QJF), World Scientific Publishing Co. Pte. Ltd., vol. 5(04), pages 1-46, December.
    • Handle: RePEc:wsi:qjfxxx:v:05:y:2015:i:04:n:s2010139215500172
    DOI: 10.1142/S2010139215500172
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    References listed on IDEAS

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    Cited by:

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    2. Helbing, Pia & Lucey, Brian M. & Vigne, Samuel A., 2019. "The determinants of IPO withdrawal – Evidence from Europe," Journal of Corporate Finance, Elsevier, vol. 56(C), pages 415-436.
    3. Amaya, Diego & Filbien, Jean-Yves & Kooli, Maher, 2022. "Media coverage and the decision to withdraw an IPO," International Review of Financial Analysis, Elsevier, vol. 84(C).

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