The Hot Tech Issue Market: A Study on Underpricing and Long-Run Post-IPO Performance of Swedish IPOs

Sammanfattning: We explore the effect on underpricing and long-run post-IPO performance of a firm being classified as high tech or low tech, based on their SIC code. By studying offer prices and post-IPO share prices of a sample of 145 Swedish IPOs between 2004-2017, we do not find support for a difference in long-run post-IPO performance. However, we document that the absolute level of underpricing, and the relative difference in underpricing between high-tech and low-tech companies, increases during the "hot-market" period of 2015-2017. Hence, as previously documented in the 1980s and 2000s, the phenomenon of a general and industry-specific increase in underpricing during hot markets continues to exist.