IPO Pricing with Bookbuilding and a When-Issued Market

This paper examines the German IPO pricing process which combines bookbuilding with a liquid pre-IPO when-issued market. We find no partial adjustment phenomenon, as has been documented for U.S. IPOs. We thus find no evidence that bookbuilding provides information for IPO pricing, beyond the information that is required to set preliminary price ranges. Once price ranges are set, when-issued trading commences and indicates how IPOs should be priced in the primary market. However, the evidence suggests that such trading does not fully supplant information gathering through bookbuilding.Initial public offerings, Bookbuilding, When-issued trading

Primary Market Design: Direct Mechanisms and Markets

We develop a model that allows for the coexistence of bookbuilding and when-issued trading. We show that, due to interactions between these two processes, allowing for when-issued trading is for the most part beneficial for issuers. When-issued trading may interfere with information gathering thorough bookbuilding, in the case that informative bookbuilding is not needed. However, informative bookbuilding may be a prerequisite for the when-issued market to function. In this case the existence of a liquid when-issued market will not interfere with information gathering through bookbuilding, and will strictly benefit the issuer.Initial public offerings, Information gathering mechanisms, When-issued trading

Snow and leverage

Using a sample of highly (over-)leveraged Austrian ski hotels undergoing debt restructurings, we show that reducing a debt overhang leads to a significant improvement in operating performance (return on assets, net profit margin). In particular, a reduction in leverage leads to a decrease in overhead costs, wages, and input costs, and to an increase in sales. Changes in leverage in the debt restructurings are instrumented with Unexpected Snow, which captures the extent to which a ski hotel experienced unusually good or bad snow conditions prior to the debt restructuring. Effectively, Unexpected Snow provides lending banks with the counterfactual of what would have been the ski hotel's operating performance in the absence of strategic default, thus allowing to distinguish between ski hotels that are in distress due to negative demand shocks ("liquidity defaulters") and ski hotels that are in distress due to debt overhang ("strategic defaulters")

Dipole anisotropies of IRAS galaxies and the contribution of a large-scale local void

Recent observations of dipole anisotropies show that the velocity of the Local Group (\Vec v_{\rm G}) induced by the clustering of IRAS galax ies has an amplitude and direction similar to those of the velocity of Cosmic Microwave Background dipole anisotropy (\Vec v_{\rm CMB}), but the difference | \Vec v_{\rm G} - \Vec v_{\rm CMB} | is still $\sim 170$ km/s, which is about 28% of |\Vec v_{\rm CMB} |. Here we consider the possibility that the origin of this difference comes from a hypothetical large-scale local void, with which we can account for the accelerating behavior of type Ia supernovae due to the spatial inhomogeneity of the Hubble constant without dark energies and derive the constraint to the model parameters of the local void. It is found as a result that the distance between the Local Group and the center of the void must be $(10 -- 20) h^{-1}$ Mpc, whose accurate value depends on the background model parameters.Comment: 13 pages, 1 figure, to be published in ApJ 584, No.2 (2003

The effects of quarterly earnings announcements on the returns of stocks

The dramatic rise in the Dow Jones Industrial Average in the last year has fueled new interest in the stock market. People are always trying to get the edge, using whatever information they can use. But does any of this information really help investors to achieve abnormal returns. Does knowledge of a stock split or an earnings announcement help the average investor to get the jump on the competition? I hope that my paper will shed some light on this subject. The purpose of my paper is to test the semi-strong form of the efficient market hypothesis. My study will try to prove that the stock market is efficient in reacting to the new information as it is released to the public. I will study the effects of the announcement of quarterly earnings on the price of securities and attempt to determine whether the stock market is efficient in reacting to the announcement. The paper is divided into four major parts. First, I will define the efficient market hypothesis and its various forms, concentrating on the semi-strong form. Next, I will present evidence from published sources both supporting and contradictory to the efficient market hypothesis. Then, I will report on the processes and results of my quarterly earnings experiment and its conclusion. Finally, I will offer a summary and conclusion as to the validity of the semi-strong form of the efficient market hypothesis

A preliminary investigation of structure 10L-16 and the West Court of the Acropolis of Copan, Honduras

For the past 100 years the jungles of southern Mexico and Central America have been slowly yielding their secrets of the ancient peoples who had once ruled them. These people, the Maya Indians, are considered to have created one of the major civilizations of the New World. These people grew from the jungle and it is from the jungle that the order of their society is derived. ... In the spring of 1988 preliminary investigations were made of structure 10L-16 in order to determine if it was feasible and worthwhile to begin a large scale investigation of the structure the following year (1989). The 1988 field work would also better prepare the investigators if indeed a large scale operation were to commence the following year by providing stratographic data, carbon samples and ceramics. The second half of this paper is concerned with the findings of the 1988 field season and includes a brief interpretation of the information extracted. In order to better understand the context of the 1988 findings a very brief history and explanation of the layout of the site of Copan is necessary

The Politics of Related Lending

This publication is with permission of the rights owner freely accessible due to an Alliance licence and a national licence (funded by the DFG, German Research Foundation) respectively.We analyze the profitability of government-owned banks’ lending to their owners, using a unique data set of relatively homogeneous government-owned banks; the banks are all owned by similarly structured local governments in a single country. Making use of a natural experiment that altered the regulatory and competitive environment, we find evidence that such lending was used to transfer revenues from the banks to the governments. Some of the evidence is particularly pronounced in localities where the incumbent politicians face significant competition for reelection.Peer Reviewe

Banking on Snow: Bank Capital, Risk, and Employment

How does small-firm employment respond to exogenous labor productivity risk? We find that this depends on the capitalization of firms' local banks. The evidence comes from firms offering (quasi-) fixed employment to workers whose productivity depends on the weather. Weather risk reduces this employment, and the effect is stronger in regions where the regional banks have less equity capital. Bank capitalization also proxies for the extent to which the regional banks’ borrowers can obtain liquidity when the regions are hit by weather shocks. We argue that, as liquidity providers, well-capitalized banks support economic adaptation to climate change

Snow and Leverage

Using a sample of highly (over-)leveraged Austrian ski hotels undergoing debt restructurings, we show that reducing a debt overhang leads to a significant improvement in operating performance (return on assets, net profit margin). In particular, a reduction in leverage leads to a decrease in overhead costs, wages, and input costs, and to an increase in sales. Changes in leverage in the debt restructurings are instrumented with Unexpected Snow , which captures the extent to which a ski hotel experienced unusually good or bad snow conditions prior to the debt restructuring. Effectively, Unexpected Snow provides lending banks with the counterfactual of what would have been the ski hotel’s operating performance in the absence of strategic default, thus allowing to distinguish between ski hotels that are in distress due to negative demand shocks (“liquidity defaulters”) and ski hotels that are in distress due to debt overhang (“strategic defaulters”).

The politics of related lending

peer reviewe