Please answer the following article-based questions, after reading and analyzing the Primary Article 07 (PA# 07), “A Review of IPO Activity: Pricing and Allocations,” (2002) by Jay R. Ritter and Ivo Welch.
Briefly summarize the Ritter & Welch article in your own words, with specific emphasis on the focus of the article, the research methodology, and the findings, in not more than two or three paragraphs. (05 points)
What are some of the reasons for companies going public? How are IPOs priced and shares allocated, and what is the usual long run performance of the newly issued shares? What were the popularly offered explanations and the views of Ritter and Welch about these three issues? (10 points)
Select any one IPO-related published article (please indicate full details of the article, such as the title, the author(s) and source), preferably about IPOs and information asymmetry, that was published after 2002 and very briefly compare it with the findings of Ritter & Welch article noted above. You should select an article that is NOT from a daily, weekly, bi-monthly, or monthly publication. (05 points)
Also, please answer the following two contemporary questions:
Select at least two recent major/significant IPOs and discuss the specifics of the issues, such as the initial expected issue price, the ultimate sale price, the first day closing price, and subsequent (short- as well as long-term) price performance. Please indicate any significant (newsworthy?) items of your selected IPOs and the amount left on the table, if any. You must select an IPO that took place after 2010 (or 2011). Also, one of the IPOs must be in the US and the other must be in any other major country. (05 points)
How would you characterize the current state of the IPO business, especially in the US? What is your opinion about some of the reasons for the current situation? What might be the immediate as well as the long-term prospects for IPOs in either the US or in any major country? (05 points)