This paper's primary goal is to illustrate how expensive gross spreads, applied by underwriters, are for equity capital collections (both IPOs and SEOs) in Italy and compare them across different nations and periods, taking inspiration from the “The Seven Percent Solution” by Chen and Ritter (2000). The other two goals are to test if these costs are related to variables that have been recognized as statistically relevant in the literature and understand their reasons and their dynamics for companies listed on the AIM Italia—focusing primarily on the relationship with the underwriters. In order to reach the first two goals, we analyzed a sample of 207 IPOs, and 169 right issues (SEOs) carried out during the period 2010-20. We carried out three case studies on companies that raised capital on the AIM Italia in the previous ten years for our last goal. Gross spread in Italy are aligned with the average spreads applied in Europe but are significantly less than those found in the U.S. Compared to previous studies in Italy, the underwriting fees have grown, especially for right issues. Similarly to previous studies, the same variables explaining the fees applied for IPOs and SEOs, apply also in Italy. We managed to find strong support for some of the most used determinants of gross spreads. Finally, we detected a completely different set of motivations and dynamics between equity capital collections on the secondary market (AIM Italia) compared to the primary market (MTA) and an unexpected set of motivations that pushes for the choice of a specific underwriter.
L’obiettivo principale di questa tesi è di illustrare quanto siano costose le commissioni di sottoscrizione relative alle raccolte di capitale (tramite IPO e SEO) in Italia e compararle a quelle rilevate in altre nazioni e periodi storici, ispirandoci al lavoro di Chen e Ritter (2000) intitolato “The Seven Percent Solution”. Gli altri due obiettivi sono testare se tali costi sono correlati a variabili già identificate dalla letteratura come statisticamente rilevanti e comprendere quali siano le ragioni e le dinamiche delle raccolte di capitale di società quotate sull’AIM Italia, concentrandoci principalmente sul rapporto con i sottoscrittori. Per poter raggiungere i primi due obiettivi, abbiamo analizzato un campione di 207 IPO e 169 aumenti di capitale in opzione (SEO) nel periodo 2010-20. Abbiamo realizzato tre casi studio su società che hanno raccolto capitali sul mercato secondario AIM Italia nei dieci anni precedenti per il nostro ultimo obbiettivo. Le commissioni di collocamento in Italia sono allineate alle commissioni medie in Europa ma sono significativamente inferiori a quelle riscontrate negli Stati Uniti. Rispetto a precedenti studi svolti in Italia, le commissioni di sottoscrizione sono aumentate, soprattutto per gli aumenti di capitale in opzione. Analogamente a studi precedentemente svolti, valgono anche in Italia le stesse variabili che spiegano le commissioni applicate per IPO e SEO. Siamo riusciti a trovare un forte supporto statistico per alcune delle determinanti più utilizzate per spiegare le commissioni di collocamento. Infine, siamo stati in grado di rilevare un insieme di motivazioni e dinamiche completamente diverse tra le raccolte di capitale sul mercato secondario (AIM Italia) rispetto al mercato principale (MTA) e un insieme inaspettato di motivazioni che spingono alla scelta di uno specifico sottoscrittore.
Costs and dynamics of IPOs and SEOs in Italy
CATTANI, MARCO;Giarola, Stefano
2019/2020
Abstract
This paper's primary goal is to illustrate how expensive gross spreads, applied by underwriters, are for equity capital collections (both IPOs and SEOs) in Italy and compare them across different nations and periods, taking inspiration from the “The Seven Percent Solution” by Chen and Ritter (2000). The other two goals are to test if these costs are related to variables that have been recognized as statistically relevant in the literature and understand their reasons and their dynamics for companies listed on the AIM Italia—focusing primarily on the relationship with the underwriters. In order to reach the first two goals, we analyzed a sample of 207 IPOs, and 169 right issues (SEOs) carried out during the period 2010-20. We carried out three case studies on companies that raised capital on the AIM Italia in the previous ten years for our last goal. Gross spread in Italy are aligned with the average spreads applied in Europe but are significantly less than those found in the U.S. Compared to previous studies in Italy, the underwriting fees have grown, especially for right issues. Similarly to previous studies, the same variables explaining the fees applied for IPOs and SEOs, apply also in Italy. We managed to find strong support for some of the most used determinants of gross spreads. Finally, we detected a completely different set of motivations and dynamics between equity capital collections on the secondary market (AIM Italia) compared to the primary market (MTA) and an unexpected set of motivations that pushes for the choice of a specific underwriter.| File | Dimensione | Formato | |
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https://hdl.handle.net/10589/170392