공적정보에 의한 분할모집공모주의 공모가결정요인

Loughran and Ritter (2002) posits that there is the considerable money left on the table since public information is not fully incorporated into the offer price. Meanwhile, Benveniste and Spindt’s (1989) partial adjustment model suggest that the initial return of IPOs is only predictable based on private information, but public the offer price should fully incorporate all public information available. Recently, Choi and Lim (2013) reported that equity carve-outs are less underpriced at the deregulation regime but it is ambiguous to be fully confirmed the effectiveness of underwriting’s rules revision since secondary equity carve-outs hold the negative coefficient to first-day returns in Korea. They posted that this finding would come from the coincidence of interest between underwriters who seek for the more incentives from fees and the parent’s motivation for maximization of proceeds since the secondary equity carve-outs have the larger offer size, calculated by multiplying the number of offered shares and the lowest of price range, than pure primary equity carve-out. Using 71 pure primary equity carve-out (hereafter ‘primary ECOs’) from 2000 to 2013, this study explore the efficiency of pricing on initial public offering(IPO) while testing consistent with prospect theory (Loughran & Ritter, 2002) as well as the effectiveness of underwriting’s rules revision. Our analyses confirmed that the parent firm’s abnormal returns during price range-setting period which is twenty-trading day prior to offering the price range and overhang as the ratio of shares retained by the parent including its related parties relative to total shares less retained shares at post-IPO, are significantly positive to initial return but price update. We define the initial return as the percentage change between the fifth-day closing price and the offer price and the price update which is the percentage change between the offering price and the midpoint of the price respectively. Furthermore, the primary ECOs are more underpriced than general IPOs at the deregulation regime, compared to results of literatures on pricing of general IPOs in Korea, due to more positive parent firm’s abnormal returns and larger overhang. This is the contrary result of Lowry and Schwert (2004)’s study, that information asymmetry is less severe for equity carve-outs. In addition, the underpricing of primary ECOs has statistically not been reduced after the underwriting’s rules are revised to be secured more discretionary authorities of underwriter. According to robustness test of underpricing, major shareholder’s ownership including its related parties’ shares, which is proxy of overhang, prior to IPO is significantly positive to both the intial return and the opportunity cost of going public, as the ratio of money left on the table to preexisting equity value which is market value at the fifth-day of closing price less sum of proceeds and money left on the table upon primary offers. And we confirm that residual of predicted price update from positive variables of public information is insignificant to initial return as well as the opportunity cost of going public. This result imply the inconsistence with Benveniste and Spindt’s (1989) partial adjustment model. Contrary to partial adjustment model, the pricing of the primary ECOs is inefficient in that underwriters do not fully reflect parent’s abnormal returns, market returns of range-setting period and overhang in the final offer range. In conclusion, these findings are strongly supported the prospect theory and corroborate with Ghosh et al.’s (2012) result on pricing of primary ECOs upon public information. Therefore, our empirical results indicate the undermining of the efficiency on primary ECOs’ pricing in spite of deregulation of underwriting’s rules that underwriters hold the wider discretionary authorities on pricing and allocations of offering shares to investors.