Invitation to PhD defence: Einar Bakke

On Friday 12 August 2011 Einar Bakke will hold a trial lecture on a prescribed topic, and defend his thesis for the PhD degree at NHH.

09.08.2011 - Red.

An Initial Public Offering (IPO) is the first sale of a firm's stock to any investor, and is usually carried out immediately prior to listing on a stock exchange. Since there exists no current market price the issuer and potential investor have to rely on public and their own private information.

One of the most prominent price setting mechanisms used in these issues over the last 25 years is called a book-building process, where the issuer sets a final offer price and decides on the allocation to investors based on potential investors bids in the built order
book.

The thesis analyses the information available from the book-building process in the shortand medium-run. The short-run analysis shows that the offer price is set closer to the market price the first day of trading in up markets compared to down markets for issues with high demand for allocations.

Formally this is explained through the investors reduced incentives to hold back information in up markets in fear of not receiving allocations. This results in a higher offer price, which is surprising as it is generally known that underpricing is higher in up markets. In the medium-run the finding is that issuers carrying out the issue, even though there is low demand for it, outperform their industry in the first 6 months after listing. The analysis is based on US data from 1981 through 2008.

Prescribed topic for the trial lecture:
Initial Public Offerings in Norway

Time of the trial lecture:
10:15 in Karl Borch's Auditorium, NHH

Title of the thesis:
Essays on IPOs

Time and place for the defense:
12:15 in Karl Borch's Auditorium, NHH

Members of the evaluation committee:
Associate professor Tommy Stamland, NHH, chairperson
Professor Per Strömberg, Stockholm School of Economics
Assistant professor Per Östberg, University of Zurich

Supervising committee:
Professor Kjell G. Nyborg, University of Zurich, principal supervisor

The trial lecture and thesis defense will be open to the public. Copies of the thesis will be
available from: [email protected]