An Analysis of Aggregate Listing Costs on NASDAQ OMX Helsinki
Pikkanen, Panu (2014)
Pikkanen, Panu
HAAGA-HELIA ammattikorkeakoulu
2014
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2014060812156
https://urn.fi/URN:NBN:fi:amk-2014060812156
Tiivistelmä
The objective of this thesis was to isolate the different costs involved in an Initial Public Offering (IPO) as well as their relative sizes to each other. While general flotation costs have been previously studied and examined, the relative importance of its constituent costs in an IPO remains a point of interest. The markets under specific consideration were the NASDAQ OMX Helsinki Official List and the First North market.
The central sections of this paper are the conceptual framework section and the subsequent empirical section. These are somewhat intertwined as necessitated by the topic. The study was conducted via expert interviews, cross-referenced with publicly available academic sources when applicable. Altogether six interviews were carried out, with two interviewees representing the underwriters, legal advisors and external auditors, respectively. Information for the theoretical framework was gathered from the aforementioned academic sources. Up-to-date data and advice was provided by NASDAQ OMX Helsinki.
The most significant costs involved in most Finnish market IPOs were confirmed to be the underwriters’ premium and the legal and auditing advisory fees, followed by various administrative costs such as registration fees and the fee for the Finnish Financial Supervisory Authority. Thirdly, costs arise from investor relations (IR) and physically publishing the prospectus. Especially marketing, communication and other IR costs can be highly variable, depending on the need to hire an external party to carry out marketing as well as expenditure on the company roadshow preceding the listing.
Further points of interest outside the scope of this study would be assessing costs involved in cross listings; seasoned equity offerings; specific costs on other markets; costs arising from multinational IPOs; and specific cost analysis from the standpoint of internal company data.
The central sections of this paper are the conceptual framework section and the subsequent empirical section. These are somewhat intertwined as necessitated by the topic. The study was conducted via expert interviews, cross-referenced with publicly available academic sources when applicable. Altogether six interviews were carried out, with two interviewees representing the underwriters, legal advisors and external auditors, respectively. Information for the theoretical framework was gathered from the aforementioned academic sources. Up-to-date data and advice was provided by NASDAQ OMX Helsinki.
The most significant costs involved in most Finnish market IPOs were confirmed to be the underwriters’ premium and the legal and auditing advisory fees, followed by various administrative costs such as registration fees and the fee for the Finnish Financial Supervisory Authority. Thirdly, costs arise from investor relations (IR) and physically publishing the prospectus. Especially marketing, communication and other IR costs can be highly variable, depending on the need to hire an external party to carry out marketing as well as expenditure on the company roadshow preceding the listing.
Further points of interest outside the scope of this study would be assessing costs involved in cross listings; seasoned equity offerings; specific costs on other markets; costs arising from multinational IPOs; and specific cost analysis from the standpoint of internal company data.