IPO Performance of Fintech Companies from Europe and the United States
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2021-08-10
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en
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Abstract
This research analyzes the short-and long-run post-IPO performance of fintech
companies from Europe and the United States compared to the financial industry as a whole.
For the short-term, issues from the fintech industry tend to be more underpriced as the initial
first-day returns are significantly higher, even when controlled for several firm, offer and
market characteristics. This effect is substantiated by the fact that firms form the fintech
industry are prone to higher levels of ex-ante uncertainty and is, despite a small difference,
found to be stronger in the United States than in Europe. There is not any evidence found for
higher levels of underperformance for fintech companies in the first and three year(s) after
the issue. In fact, they tend to perform better than firms from the financial industry as a
whole. The results of this research can be useful for fintech firms that are to conduct an IPO,
as they could increase their offer price and leave less money on the table. For the investors,
these findings show that the short-term gains of the first-day returns tend not to be offset by
long-term losses and fintech firms could therefore be considered as profitable investments.
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Faculteit der Managementwetenschappen