Zero-revenue IPOs

Andrea Signori*

*Autore corrispondente per questo lavoro

Risultato della ricerca: Contributo in rivistaArticolo in rivistapeer review

4 Citazioni (Scopus)


Information-based models of the IPO decision suggest that going public before having generated revenues is inefficient. Still, 15% of firms going public in Europe have not reported revenues prior to the IPO. This paper investigates why these firms decide to conduct an IPO and examines whether the absence of revenues affects the outcomes of this decision. The evidence shows that zero-revenue firms go public to fund investments, mainly in the form of R&D. However, their shares are more underpriced at the IPO and develop less liquid and more volatile aftermarket trading than those of revenue-generating issuers. These effects are driven by firms whose revenue-less status is more persistent, as 18.6% still report no revenues at their three-year IPO anniversary. Also, zero-revenue issuers face a higher risk of being delisted shortly after the IPO. Overall, the evidence indicates that zero-revenue firms go public in an attempt to fund superior growth opportunities, but the high levels of information asymmetry and uncertainty increase the cost of raising capital and the risk of an early delisting.
Lingua originaleEnglish
pagine (da-a)106-121
Numero di pagine16
RivistaInternational Review of Financial Analysis
Stato di pubblicazionePubblicato - 2018


  • Growth opportunities
  • IPOs
  • Information asymmetry
  • Zero revenues


Entra nei temi di ricerca di 'Zero-revenue IPOs'. Insieme formano una fingerprint unica.

Cita questo