This thesis will contribute to the topic of underpricing in initial public oﬀerings (IPO) mechanism, speciﬁcally addressing the growing discussion in the venture cap-ital (VC) industry about the fairness of the mechanism. Using a sample of IPOs between 2001 and 2019, the thesis ﬁnds that ﬁrms backed by VC-ﬁrms experience a higher degree of ﬁrst-day returns when comparing to non-VC-backed ﬁrms. Further, the thesis introduces the direct listing method as an option to address inef-ﬁciencies in the IPO market, and discusses whether this can be a viable substitute. While the method is new, and there exist some legal gray areas that would have to be sorted out, the thesis concludes that the direct listing method can become an attrac-tive method for ﬁrms pursuing access to the capital markets without experiencing the wealth transfer that occurs in a traditional IPO.
|Educations||MSc in Finance and Investments, (Graduate Programme) Final Thesis|
|Number of pages||75|