Influence of financial performance on underpricing of shares
Keywords:Current Ratio, ROA, ROE, EPS, PER, Underpricing of Shares
Differences in shares prices before being traded on the secondary market caused investors to prefer to buy shares through the initial market at a much lower set price (underpricing of shares The Company wants to signal open information in terms of financial statements to investors by publishing a prospectus financial statement containing the financial performance of the company so that the company can make the right decisions regarding future investments and avoid information asymmetry (Guiness, 1992). This research aims to empirically test independent variables namely financial performance against variable dependent underpricing shares of banking corporations in 2019-2020, both simultaneously and partially. This study sampled as many as 60 banking corporations taken by purposive sampling methods. This study sampled as many as 60 banking corporations taken by purposive sampling methods. This research uses a quantitative approach through multiple regression analysis testing. The researcher found by partially testing that Earnings Per Share (X4), and Price Earning Ratio (X5) variables together influenced on Of Shares underpricing, whereas, the Current Ratio (X1), Return on Equity-ROE (X1), and Return of Assets-ROA (X3) variables had no significant influence on under-pricing of shares.
Ali, Q., Parveen, S., Yaacob, H., Zaini, Z., & Sarbini, N. A. (2021). COVID-19 and dynamics of environmental awareness, sustainable consumption, and social responsibility in Malaysia. Environmental Science and Pollution Research, 1-20. 10.1007/s11356-021-14612-z
Ang, R. (1997). The Intelligent Guide to Indonesia Capital Market. Jakarta: Mediasoft Indonesia.
Fernando, J. (2021, September 9). Investopedia.com. Retrieved October 22, 2021, from Investopedia: https://www.investopedia.com/terms/p/price-earningsratio.asp
Garrison, N., & Brewer. (2007). Managerial Accounting Akuntansi Manajerial (Vol. 11). (E. T. Nuri Hinduan, Ed.) Jakarta, Indonesia: Graha Ilmu.
Guiness, P. (1992). An Examination of The Underpricing of Initial Public Offering in Hongkong 1980-1990. Journal of Business Finance and Accounting, 19(2), 165-186. https://doi.org/10.1111/j.1468-5957.1992.tb00617.x
Huang, W., Li, J., & Zhang, Q. (2019). Information asymmetry, legal environment, and family firm governance: Evidence fro IPO Underpricing in China. Pacific-Basin Finance, 57(101109). https://doi.org/10.1016/j.pacfin.2019.01.005
Klova, V. (2017, August 18). IPO Underpricing: What About the Shipping Sector? (G. M. Mullin, Ed.) Journal of Multinational Financial Management, 42-43, 95-115. https://doi.org/10.1016/j.mulfin.2017.08.001
Parveen, S., Senin, A. A., & Umar, A. (2015). Organization culture and open innovation: A quadruple helix open innovation model approach. International Journal of Economics and Financial Issues, 5, 335-342. https://www.econjournals.com/index.php/ijefi/article/view/1399.
Qureshi, M. I., Parveen, S., Abdullah, I., & Dana, L. P. (2021). Reconceptualizing the interventions of open innovation systems between the nexus of quadruple organization cultural dynamics and performance. Quality & Quantity, 55(5), 1661-1681. https://doi.org/10.1007/s11135-020-01078-3
Salerno, D., Sampagnaro, G., & Verdoliva, V. (2021, April 16). Fintech and IPO underpricing: An explorative study. Finance Reserach Letters, 13. https://doi.org/10.1016/j.frl.2021.102071
Song, S., Tan, J., & Yi, Y. (2014). IPO Initial Returns in China: Underpricing or Overvaluation, 7(1), 31-49. China Journal of Accounting Research. http://dx.doi.org/10.1016/j.cjar.2013.12.001