IPO trends and factors affect IPO decisions

Abstract

The initial public offering is the negligible stage before the company goes public, especially when it needs a large amount of money to support its development. This thesis tries to specify what factors affect initial public offering (IPO) and to verify what factors can influence the aftermarket performance of IPO, based on IPO trends. Furthermore, this thesis also wants to test whether there exists a difference in IPO long-term performance between the U.S. market and the China market from 2014 to 2018. The methodology used in this thesis is the multiple regression analysis and the difference in mean test. The results of this thesis display that internal factors as price-earnings ratio and external factors as GDP can affect total money raised in IPO, while earnings per share and cash ratio can significantly influence IPO aftermarket performance. Besides, Chinese companies have similar IPO aftermarket performance to American companies for sample companies.