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IPO Offering Size and Analyst Forecasts

Author

Listed:
  • Chuntai Jin

    (Department of Business and Office Administration, Grande Prairie Regional College, Canada)

  • Tianze Li

    (Department of Accounting and Finance, Asper School of Business, University of Manitoba, Canada)

  • Steven Xiaofan Zheng

    (Department of Accounting and Finance, Asper School of Business, University of Manitoba, Canada)

Abstract

In this paper, we examine how analysts react to IPO percentage offering size. We find that analysts predict lower long-term earnings growth rates for IPOs with larger percentage offering size. The sizes of both primary and secondary offering are negatively related to long-term growth rate forecasts. We find evidence that the free cash flow effect may be related to the negative relation between primary offering size and growth forecast.

Suggested Citation

  • Chuntai Jin & Tianze Li & Steven Xiaofan Zheng, 2016. "IPO Offering Size and Analyst Forecasts," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 19(03), pages 1-25, September.
    • Handle: RePEc:wsi:rpbfmp:v:19:y:2016:i:03:n:s021909151650020x
    DOI: 10.1142/S021909151650020X
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    References listed on IDEAS

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    Cited by:

    1. Guanming He & Helen Mengbing Ren & Richard Taffler, 2020. "The impact of corporate tax avoidance on analyst coverage and forecasts," Review of Quantitative Finance and Accounting, Springer, vol. 54(2), pages 447-477, February.

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