Uncovering the Dynamics of Cornerstone investors in Scandinavian IPOs: Money Left on the Table? An empirical study of cornerstone commitments and its impact on subsequent underpricing of Scandinavian IPOs.
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- Master of Science 
This study examines the relationship between IPO underpricing and the involvement of cornerstone investors in the Scandinavian IPO market. Utilizing comprehensive regression models, our analysis reveals a strong and positive association between cornerstone involvement and the subsequent IPO underpricing. The findings suggest that the certification endorsement from cornerstone investors positively affects the market valuation and demand for the IPO, leading to excess underpricing. The underpricing can be attributed to higher secondary market prices and performance rather than unrealized proceeds, and therefore not constituting money left on the table. Additionally, the causal relationship between cornerstone investors and underpricing is amplified during periods of hot market sentiment. These insights have implications for issuing firms, investors, and underwriters in understanding the benefits of attracting cornerstone investors in the IPO process
Masteroppgave(MSc) in Master of Science in Business, Finance - Handelshøyskolen BI, 2023