Author : Sandra F. Holsonback
Release : 2003
Genre : Going public (Securities)
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Initial Public Offerings and Real Estate Investment Trusts - read free eBook in online reader or directly download on the web page. Select files or add your book in reader. Download and read online ebook Initial Public Offerings and Real Estate Investment Trusts write by Sandra F. Holsonback. This book was released on 2003. Initial Public Offerings and Real Estate Investment Trusts available in PDF, EPUB and Kindle. Initial Public Offerings (IPOs) are financial vehicles whereby firms can raise capital through public markets. These vehicles increased in importance in the 1990's when financial institutions were reluctant to lend money, especially to young or unestablished firms. Private real estate companies, hampered by these tight credit markets, formed Real Estate Investment Trusts (REITs), a public entity. REIT IPOs trade on the same markets and are subject to the same SEC regulations as equity stocks, but the lack luster behavior of their initial stock offerings is opposite to large initial day returns exhibited by equity stocks. In proposing that underpricing is a strategy utilized by the firm and the underwriter, this study, comparing IPOs of four industries: retail, manufacturer of communication equipment, software development, and REITs, validates the theory of asymmetric information, whereby investors are compensated for risk through underpricing.