The IPOs of Canadian Firms via Installment Receipts: The Opening Performance and Implications for the Short‐run Efficiency of the Canadian Market
Bibliographic record
Abstract
Abstract This paper tracks the performance of 75 Canadian installment receipt initial public offerings (IR IPOs) from the first day of trading to up to 24 weeks after the issue. During the first trading day of the IRs, a positive average raw return of 4.5% was realized. This represents an abnormal return of 2.57%. During the same period, the underpriced IPOs realized a net gain of 10.14%, while the overpriced IPOs realized a net loss of 4.3%. The magnitude of underpricing increased during the first month of aftermarket trading before being eliminated. This confirms the existence of short‐term trends in the aftermarket prices of the IR IPOs and points to the existence of short‐run investor overreaction in the IR IPO market. Our results also confirm IPO underpricing theory, documented in the literature: that the greater the exante uncertainty surrounding the value of the issue the greater the degree of underpricing. The ex‐ante uncertainty proxy variables found to have signficant effect on underpricing are the size of the issue, the age of the issuing firm, the total risk, the market risk, the commission rate, and liquidity of the issue. We also found a significant difference in the degrees of underpricing for IPOs with IR only and those with both IR and fully paid common shares and also for unit trust and common stock IPOs. IR common stock IPOs are found to be more underpriced than IR unit trust IPOs. Résumé Dans cet article nous évaluons les résultats boursiers de Premiers appels publics à l'épargne offrant l'option de Versements échelonnés (PAPE‐VE), du premier jour de transaction jusqu'à la 24e semaine après leur émission. Le premier jour de la transaction, les titres VE obtiennent un rendement brut moyen de 4,5%, soit un rendement anormal de 2,57%. Pendant la même période, les PAPE sous‐évalués réalisent un bénéfice net de 10,14% tandis que les PAPE surévalués perdent 4,3%. Cette sousévaluation se poursuit pendant le premier mois de transaction après bourse avant d'être éliminée par la suite. Cette situation confirme l'existence de tendances conjoncturelles dans les transactions après bourse des PAPE‐VE et met en exergue la réaction démesurée à court terme des partenaires du marché. Nos résultats confirment la théorie de la sous‐évaluation des PAPE amplement documentée dans la littérature. D'après cette théorie, plus le niveau de l'incertitude relative à la valeur de l'émission est élevé, plus la sous‐évaluation est grande. Les indicateurs d'incertitude reliés de façon remarquable à la sous‐évaluation sont: la taille de l'émission, l'âge de l'émetteur, le risque total, le risque de marché, le taux de commission, et la liquidité de l'émission. Nous avons également constaté de grandes différences dans le niveau des sous‐évaluations d'une part entre les PAPE et les VE, d'autre part entre les VE et les actions ordinaires intégralement acquittées et enfin entre la fiducie d'investissement à participation unitaire et les PAPE d'actions ordinaires. Les PAPE‐VE d'actions ordinaires sont plus sous‐évalués que ceux des unités de fiducie.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.004 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.002 | 0.002 |
| Science and technology studies | 0.001 | 0.001 |
| Scholarly communication | 0.002 | 0.000 |
| Open science | 0.000 | 0.001 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.003 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".