The competitive effects of IPOs and follow-ons Evidence from the Brazilian market

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Published: Mar 11, 2024
DOI: https://doi.org/10.12660/rbfin.v22n1.2024.90511
Keywords:
Initial Public Offering Follow-on Competitors Share issue

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Nádia Videira
Sao Paulo School of Economics - FGV
F. Henrique Castro
Sao Paulo School of Economics - FGV
https://orcid.org/0000-0001-7456-2354
Vinicius Augusto Brunassi Silva
Fundação Escola de Comércio Alvares Penteado - FECAP
https://orcid.org/0000-0002-1299-321X

Abstract


We evaluate competitors' short-term reactions to initial public offerings (IPO) and follow-on events in the same industry. Using a sample of Brazilian companies that carried out public issuance of shares from 2016 to 2020, we show that IPO events generate adverse effects on the share prices of its industry rivals, while follow-on offers have reverse implications. In addition, the primary distributions' short-term effects are better than the secondary issuance ones.

Article Details

How to Cite
Videira, N., Castro, F. H., & Brunassi Silva, V. A. (2024). The competitive effects of IPOs and follow-ons: Evidence from the Brazilian market. Brazilian Review of Finance, 22(1), 31–60. https://doi.org/10.12660/rbfin.v22n1.2024.90511
Issue
Vol. 22 No. 1 (2024): January-March
Section
Long Paper
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This work is licensed under a Creative Commons Attribution 4.0 International License.

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Author Biography

Vinicius Augusto Brunassi Silva, Fundação Escola de Comércio Alvares Penteado - FECAP

Professor Pesquisador do Mestrado Profissional em Finanças - FECAP Doutor em Finanças - FGV