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Q6. Initial Public Offerings (IPOs) (a) IPO underpricing is a worldwide phenomenon. Analyse any two (2) theories offered by financial economists to explain this phenomenon.

Q6. Initial Public Offerings (IPOs)

(a) IPO underpricing is a worldwide phenomenon.

Analyse any two (2) theories offered by financial economists to explain this phenomenon. Use examples, where appropriate. (10 marks)

(b) Two recent IPOs in 2021 were Deliveroo (in London) and Roblox (in New York). Explain the process behind bringing a company to an IPO.

Suppose that you are employed as a transportation / technology sector research analyst.

Required: brief report detailing the key factors that you would consider in evaluating whether to buy Deliveroo or Roblox shares. (23.3 marks) Total 33.3 marks

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