IPOs issued during the COVID-19 pandemic in Norway and Sweden

Abstract

This thesis investigates the COVID-19-induced information uncertainty and its effect on IPOs in Norway and Sweden—utilizing underpricing and post IPO stock return volatility as proxies for information uncertainty. We do a comprehensive analysis investigating the dynamics of IPOs issued from 2018 until 2021 to capture the effect of the COVID-19 pandemic. Per previous research on other financial markets, we found that the COVID-19 pandemic adversely impacted the IPO market. The IPO information uncertainty increased following the pandemic intensity and government responses. IPOs listed during the COVID-19 pandemic experienced 7% greater underpricing and a 1.5% increase in post IPO stock volatility, fluctuating in tandem with the respective countries’ macroeconomic trends.