Determinants of Short-Run IPO Performance Evidence from Swedish IPOs

Abstract

This thesis examines how pre-IPO deal-level characteristics influence short-term market performance for Swedish IPOs from 2001 to 2024. Specifically, it analyzes the effects of free float, the ratio of secondary shares to primary shares, and price revisions on market-adjusted returns over one, ten, and 252 trading days post-listing. The study finds a significant negative relationship between free float and initial returns, aligning with agency and information asymmetry theories. The ratio of secondary to primary shares does not significantly impact short-term IPO performance. However, price revisions show a positive relationship with initial returns, indicating that stronger investor demand leads to greater underpricing. These findings contribute to IPO literature and offer practical insights for market participants in Sweden.