Risk Management Strategy in IPO Activity

DOI

10.2991/aebmr.k.220307.071How to use a DOI?

Keywords

Review; Initial Public Offerings; Risks; Litigation

Abstract

While more firms choose to go public, more risks are involved. To reduce accompanied risks, we review the theory, evidence, and correspondence strategies on different risks of IPO activity: (1) IPO failure risk, (2) litigation risk, and (3) systematic risk. Our perspectives are threefold: First, we evaluate the life cycle theory and market time theory of pre-IPO activity. We believe that going public at the right timing and with reasonable market forecast will reduce failure risk. Second, the potential cost of litigation risk is high, and the risk is related to underperformance and misstatement. Third, market factors are the determinants of risk levels. We conclude that litigation risk is in fact rather threatening due to the nature of exposure and transparency.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Xinyi Zhang
AU  - Wenxi Zhong
AU  - Chongxi Bai
PY  - 2022
DA  - 2022/03/26
TI  - Risk Management Strategy in IPO Activity
BT  - Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)
PB  - Atlantis Press
SP  - 444
EP  - 450
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220307.071
DO  - 10.2991/aebmr.k.220307.071
ID  - Zhang2022
ER  -