The Pricing and Performance of Supercharged IPOs

• 成果类型: Article
• 署名作者: Edwards, Alexander; Hutchens, Michelle; Rego, Sonja Olhoft
• 署名单位: University of Toronto; University of Illinois System; University of Illinois Chicago; University of Illinois Chicago Hospital; Indiana University System; Indiana University Bloomington
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-52304
• 发表日期: 2019
• 页码: 245-273
• 关键词: OPERATING PERFORMANCE; benefits

摘要

This study examines a new form of initial public offerings, supercharged'' IPOs, where a firm-organized pre-IPO as a pass-through entity undergoes a series of transactions that steps-up the adjusted tax basis of the IPO firm's assets. This step-up imposes tax liabilities on pre-IPO owners, but also creates significant future tax benefits for the firm; the average anticipated deferred tax asset is $486 million ($13 per share) for our sample of supercharged IPO firms. Pursuant to tax receivable agreements, supercharged IPO firms pay a large portion of these tax benefits to pre-IPO owners as they are realized in the future. Future firm performance must be sufficiently strong for the IPO firm and the pre-IPO owners to realize the future tax benefits created by the supercharged transaction structure. We hypothesize and provide evidence of higher IPO offer prices and stronger future performance for supercharged IPO firms relative to traditional IPO firms.