IPO Underpricing on Aktietorget First North - An empirical study on how Guarantors, Management ownership and Management commitments affect underpricing

摘要

Underpricing is a widely discussed phenomenon in previous literature and refers to abnormal first-day returns on initial public offerings (IPO). An IPO is the first time a stock is offered to the public and is in Sweden often done by smaller companies seeking capital to expand their business. This thesis addresses underpricing on 210 Swedish companies listed on the market places Aktietorget and First North during 2010-2016. Special emphasis is put on guarantors, management ownership and management commitments, using data from prospectus and memorandums released in connection with the IPO. Previous research has, to a wide extent, explained underpricing with asymmetric information theories and has found that management ownership increase underpricing. Sparse research is done on guarantors and management commitments, why comparable research has been used to form hypotheses. We find that guarantors significantly decrease underpricing but also that management ownership and management commitments does not significantly affect underpricing for companies listed on Aktietorget and First North during the researched period.