Danske børsnoteringer 1997-2015

Abstract

This thesis contributes to the study of the Danish IPO market. The thesis investigates factors that might have influenced the 59 IPO’s in the period from 1997-2015. The main scope is to analyze to what extent there has been an abnormal return for investors, who have invested in IPO’s on the Danish stock exchange, and which internal and external factors might be present when experiencing these abnormal returns. a The author had expected to find a declining nominal return when the investor placed orders for larger amounts. By applying the distribution to investors that ordered different amounts in a given IPO, it was expected that up to a given amount the investors nominal return would increase. Hence the hypothesis was that above a certain amount, the nominal return would start to decrease. This hypothesis is due to the fact that often a private investor receives a small distribution when the IPO has a high initial performance. On the other hand, investors often get a larger distribution when the IPO has a low initial performance. The results found in this thesis, were unable to support the author’s hypothesis. This is mainly due to the fact, that private investors on an average received a larger distribution than assumed. Furthermore, this thesis confirmed the hypothesis, that the there was a negative correlation between a larger amount ordered in the IPO and the relative amount received in the distribution. In extension to rejecting the above mentioned hypothesis, that an abnormal return is only for smaller investors, the thesis has focused on a number of internal and external factors that might influence the initial return on the stock. The analysis finds many interesting facts, but a lot of the sub-analysis showed no statistical significance. However, the thesis finds that the volatility in the stock market when introducing an IPO, as well as the number of times the offer has been oversubscribed, shows a statistical significance. Volatility is furthermore an ex ante information, and therefore can be used by investors when assessing future IPO’s. Lastly this thesis sums up its main points by concluding how the internal and external factors might influence the IPO. This is however done without looking at statistical significance and will only serve as a guideline for investors when analyzing future IPO’s on the Danish Stock Exchange.