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IPO performance and earnings expectations: some French evidence

IPO performance and earnings expectations: some French evidence

Table 2 – Part A

Table 2 – Part A Descriptive statistics by IPO year The sample consists of 243 IPOs that occurred on the French Second Marché and Nouveau Marché between January 1991 and July 1998. NM and SM are respectively Nouveau Marché and Second Marché, the exchanges on which most companies go public in France. OPM, PG and OPF are the 3 IPO procedures available in France. They are respectively an auction, a procedure equivalent to the American book-building, and a fixed-price mechanism. Kventur, k-bank and k-perso are dummy variables equal to 1 respectively if more than 10% of the shares are held by capital-venture funds, more than 10% of the shares are held by banks, and more than 90% of the shares are held by managers of the firm prior to the IPO. Goal-fina, goal-acqu and goal-exit are dummies equal to 1 when the announced reason for going public is respectively to improve the firm’s financial structure, to acquire a company, or to allow the main shareholders to get out of the firm’s capital. Size is the natural log of market capitalization expressed in thousands of French Francs. % of shares created is equal to the ratio of shares created at the date of the IPO to the total number of shares issued. Long-term debt is equal to the ratio of long term debt to book-value at IPO date. Initial return (10-day underpricing) is calculated as the return between IPO and the 10 th trading day following the offering. Market conditions are calculated for each IPO as the weighted average of monthly returns of the MIDCAC index over the 3-month period preceding the IPO. IQR is the Inter-Quartile Range. 91 92 93 94 95 96 97 98 All years All IPOs 8 3 9 32 13 45 54 79 243 Exchange NM=1 0 0 0 0 0 15 18 28 61 SM=1 8 3 9 32 13 30 36 51 182 IPO OPM=1 2 2 1 11 8 23 21 26 94 procedures PG=1 0 1 1 11 1 19 30 52 115 OPF=1 4 0 5 7 3 3 3 1 26 Announced Goal-fina=1 0 1 0 4 1 9 8 15 38 IPO reasons Goal-acqu=1 0 0 0 4 3 6 17 16 46 Goal-exit=1 0 0 0 1 0 0 0 11 12 % of shares Mean 0 0 17% 25% 17% 42% 45% 44% 37% created Median 0 0 0 0 0 39% 50% 50% 28% IQR 0 0 18% 46% 0 80% 73% 82% 73% Initial return Mean 10.3% 5.7% 25.6% 6.6% 5.4% 15.7% 17.6% 25.2% 17.5% (10-day Median 5.6% 8.7% 22.9% 1.6% 3.8% 9.8% 11.3% 12.7% 7.9% underpricing) IQR 13.3% 9.1% 16.1% 12.2% 9.7% 2.7% 34.1% 35.6% 27.1% Market Mean -0.5% 0.8% 1.9% -1.5% -1.2% 2.2% 0.9% 4.8% 2.0% conditions Median -0.4% 2.6% 2.7% -2.3% -0.4% 2.1% 0.6% 5.0% 1.7% IQR 2.0% 8.3% 2.0% -3.1% 2.7% 2.4% 2.6% 5.4% 4.4% Size Mean 12.22 13.16 13.35 12.88 12.57 12.58 12.36 12.41 12.54 Median 12.13 12.55 13.11 12.70 12.06 12.50 12.20 12.37 12.38 IQR 1.57 3.77 1.58 1.37 2.12 1.28 1.11 1.08 1.32 Age at IPO Mean 13 53 18 24 19 18 15 16 18 date Median 13 52 11 17 21 14 10 11 12 IQR 15 16 18 27 16 16 11 12 16 Book-to- Mean 0.50 0.48 0.48 0.44 0.47 0.23 0.21 0.25 0.30 market Median 0.43 0.55 0.33 0.36 0.38 0.22 0.17 0.17 0.22 IQR 0.40 0.30 0.50 0.38 0.30 0.20 0.18 0.24 0.24 Long-term Mean 17% 19% 29% 20% 17% 22% 24% 22% 22% debt Median 12% 11% 25% 18% 15% 23% 23% 21% 21% IQR 31% 35% 12% 19% 13% 20% 19% 22% 20% Pre-IPO k-ventur=1 2 0 0 5 0 6 6 6 25 shareholders k-bank=1 4 0 6 17 3 11 13 21 75 k-perso=1 2 2 2 8 7 24 32 34 111 30

Table 2 – Part B Descriptive statistics by exchange The sample consists of 243 IPOs that occurred on the French Second Marché and Nouveau Marché between January 1991 and July 1998. NM and SM are respectively Nouveau Marché and Second Marché, the exchanges on which most companies go public in France. OPM, PG and OPF are the 3 IPO procedures available in France. They are respectively an auction, a procedure equivalent to the American book-building, and a fixed-price mechanism. Kventur, k-bank and k-perso are dummy variables equal to 1 respectively if more than 10% of the shares are held by capital-venture funds, more than 10% of the shares are held by banks, and more than 90% of the shares are held by managers of the firm prior to the IPO. Goal-fina, goal-acqu and goal-exit are dummies equal to 1 when the announced reason for going public is respectively to improve the firm’s financial structure, to acquire a company, or to allow the main shareholders to get out of the firm’s capital. Size is the natural log of market capitalization expressed in thousands of French Francs. % of shares created is equal to the ratio of shares created at the date of the IPO to the total number of shares issued. Long-term debt is equal to the ratio of long term debt to book-value at IPO date. Initial return (10-day underpricing) is calculated as the return between IPO and the 10 th trading day following the offering. Market conditions are calculated for each IPO as the weighted average of monthly returns of the MIDCAC index over the 3-month period preceding the IPO. IQR is the Inter-Quartile Range. Second Marché (SM) Nouveau Marché (NM) All exchanges All IPOs 182 61 243 IPO OPM=1 94 0 94 procedures PG=1 54 61 115 OPF=1 26 0 26 Announced Goal-fina=1 32 6 38 IPO reasons Goal-acqu=1 41 5 46 Goal-exit=1 12 0 12 % of shares Mean 23% 78% 37% created Median 0% 82% 28% IQR 49% 38% 73% Initial return Mean 15.8% 22.8% 17.5% (10-day Median 7.8% 9.8% 7.9% underpricing) IQR 24.2% 34.4% 27.1% Market Mean 1.5% 3.4% 2.0% conditions Median 1.1% 2.5% 1.7% IQR 4.6% 5.3% 4.4% Size Mean 12.68 12.11 12.54 Median 12.45 11.79 12.38 IQR 1.38 0.99 1.32 Age at IPO Mean 21 9 18 date Median 15 8 12 IQR 19 6 16 Book-to- Mean 0.35 0.12 0.30 market Median 0.28 0.09 0.22 IQR 0.28 0.12 0.24 Long-term Mean 21% 27% 22% debt Median 20% 25% 21% IQR 19% 22% 20% Pre-IPO k-ventur=1 19 6 25 shareholders k-bank=1 61 14 75 k-perso=1 87 24 111 31

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