Media coverage and biotechnology IPOs: Some Australian evidence
- PDF / 105,140 Bytes
- 5 Pages / 595 x 842 pts (A4) Page_size
- 88 Downloads / 171 Views
Paul Jens is a PhD candidate with RMIT University. He has a background in equity research analysis and his research interests include valuation, initial public offerings and Australian biotechnology investment. His dissertation is titled ‘Valuation and Business Models of Australian Biotechnology Companies’ and investigates the challenges facing the Australian industry and how firms have responded, the phenomenon of IPO underpricing in the biotechnology sector and the application of contemporary valuation tools to biotechnology investment. He hopes to submit his thesis by late 2006. Robert Brooks is a Professor in the Department of Econometrics and Business Statistics, Head of Faculty for the Berwick and Peninsula campuses and Associate Dean (Research Quality) in the Faculty of Business and Economics, Monash University. His broad research interests are in the area of financial econometrics with a particular emphasis on asset pricing and risk estimation. An area of work has been on how R&D expenditure is valued by capital markets and this has also involved an analysis of the valuation of biotechnology firms at both the IPO and listing stages. Gina Nicoletti is an Associate Professor in the School of Applied Sciences at RMIT. Gina has broad experience in education and research in biotechnology, both in industry and academia and extensive experience in product development and commercialisation. Scientific research interests are in structure–activity relationships and in vitro and in vivo profiling of bioactive compounds. Gina leads and teaches postgraduate programmes in emerging molecular technologies and biotechnology management. Roslyn Russell is a Senior Research Fellow in the Business Portfolio at RMIT. Her research interests are in the area of entrepreneurship with applications across a range of areas including tourism, financial literacy and biotechnology. Her research in the biotechnology area has also examined business models used by Australian companies in the sector.
Abstract This paper analyses Australian biotechnology initial public offerings and the role of media coverage during the issue period in explaining capital raising, sentiment and underpricing. This paper finds empirical support for the hypothesis that an issuing company that receives more press coverage during the listing process leaves significantly more money on the table than those who receive less coverage, a finding consistent with the presence of sentiment effects and hot issue periods.
Journal of Commercial Biotechnology (2006) 13, 43–47. doi:10.1057/palgrave.jcb.3050033 Keywords: initial public offerings, biotechnology, media coverage, market sentiment
INTRODUCTION The underpricing of initial public offerings (IPOs) is now a consistently established finding in the empirical finance literature
Correspondence: Robert Brooks, Department of Econometrics and Business Statistics, Monash University, PO Box 1071, Narre Warren, Victoria 3805, Australia Tel: + 61 3 99047224 Fax: + 61 3 99047225 E-mail: [email protected]
© 2006
Data Loading...
