Here is the synopsis of our sample research paper on Issues for Investor Consideration in IPO's. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 3 page paper looks at the major issues that investors may need to consider when looking at investing in an IPO. The issues discussed include under pricing, hype, common sense and investment assessment practices. The bibliography cites 6 sources.
Page Count:
3 pages (~225 words per page)
File: TS65_TEIPOinvest.doc
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Unformatted sample text from the term paper:
However, despite some evidence to support that idea that there may be under pricing which attracts investors with the promise of short term returns there are also dangers, as seen
with the recent Facebook IPO where following the launch $16 billion was lost by investors in the subsequent trading (Kumar, 2012). Notability, it is argued that many of the problems
faced by the Facebook IPO which resulted in this loss were not unique, and are present in other IPOs (Schwartz, 2012). Therefore, there are many different issues which investors need
to consider before investing in an IPO. A key aspect of any IPO is the presence of a high level of asymmetry of information; the potential investors have a very
limited level of knowledge regarding the investment being offered when compared to alternate investment choices which are already being traded (Schwartz, 2012). Indeed, information regarding the Facebook financial projection which
emerged following the IPO played an important role in the losses incurred by the Facebook investors (Kumar, 2012). This asymmetry of information is a key issue that should be considered
in the way a potential investor assesses an investment. Less knowledge increases the potential risk, and therefore should impact on the assessment of the risk reward equation (Nellis and Parker,
2006). In the past this asymmetry has been assessed as one of the main reasons for the initial undervaluing of IPOs (Baron, 1982). However, investors should be aware that assumptions
of an IPO having an under valuation have not always been correct, as there is evidence for and against under valuation (Muscarella and Vetsuypens, 1989). Indeed, the research indicates that
in many recent cases despite an initial flurry the prices of the shares have resulted in a dip following the initial days of trading (Schwartz, 2012). Increased information proliferation
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