Where is the missing value? Evidence from the game industry IPOs underpricing in Poland

		2016	2017	2018	2019	2020
NewConnect	Listed companies	406	408	387	375	377
NewConnect	Debuting companies	16	19	15	15	14
WSE Main Market	Listed companies	487	482	465	449	436
WSE Main Market	Debuting companies	19	15	7	7	7

* The table does not include withdrawals of companies from the stock market.

WSE, Warsaw Stock Exchange.

NC INDEX, WIG 20, and WIG Games indices in 2016–2020. Although the WIG Games sector index was launched on March 18, 2019, its values were presented starting from September 21, 2018.
*Source*: WSE data. WSE, Warsaw Stock Exchange.

Table 2

Characteristics of the first offers rate of returns from the game and all sectors

		D1	M1	Y1
Game IPOs (All: 32)	Min-Max (%)	−69.5 to 250.5	−80.2 to 379.7	−81.0 to 657.8
	Median (%)	32.7	49.8	57.1
	Mean (%)	55.0	57.5	86.8
	SD (%)	79.6	91.3	151.5
Game IPOs (NewConnect: 25)	Min-Max (%)	−69.5 to 250.5	−80.2 to 379.7	−81.0 to 657.8
	Median (%)	34.5	48.6	66.8
	Mean (%)	58.9	64.3	101.9
	SD (%)	87.2	101.0	161.6
Game IPOs (Main Market: 7)	Min-Max (%)	−6.9 to 101.9	−14.4 to 67.6	−56.4 to 179.1
	Median (%)	30.9	57.0	1.7
	Mean	41.2	32.8	26.6
	SD	45.2	37.3	90.1
No-game IPOs (All: 67)	Min-Max (%)	−44.0 to 620.0	−72.0 to 485.1	−88.5 to 1,186.7
	Median (%)	13.6	9.4	−15.1
	Mean (%)	48.5	39.3	57.2
	SD (%)	105.5	95.5	206.6
No-game IPOs (NewConnect: 44)	Min-Max (%)	−44.0 to 620.0	−72.0 to 485.1	−88.5 to 1,186.7
	Median (%)	37.4	15.8	−1.9
	Mean (%)	71.3	55.8	90.2
	SD (%)	122.3	114.4	246.2
No-game IPOs (Main Market: 23)	Min-Max (%)	−29.3 to 62.8	−32.0 to 84.9	−79.7 to 179.1
	Median (%)	3.8	5.4	−19.6
	Mean (%)	5.1	8.5	−4.0
	SD (%)	15.7	21.3	68.3

[i] Source: Own study based on WSE yearbooks 2016–2020.

[ii] WSE, Warsaw Stock Exchange.

Table 3

Characteristics of the first offers rates of returns from the game and no-game sectors in the period 2016–2020

	All game sector	Game sector: private offers	Game sector: public offers	Game sector: NewConnect	Game sector: Main Market
Mean (%)	55.0	87.7	22.3	58.9	41.2
SD	0.795664964	0.936708	0.450111	0.871573	0.451503
t-Statistics	3.911173637	3.746282	1.981368	3.377911	2.413904
Statistical significance	^***	^***	^*	^***	^*
N	32	16	16	25	7

	No-game sector	No-game: private offers	No-game: public offers	No-game: NewConnect	No-game: Main Market
Mean (%)	48.5	44.3	36.3	71.3	5.1
SD	1.0550432	0.561801	1.202298	1.24181	0.157155
t-Statistics	3.7656406	4.800103	1.596541	3.805891	1.551933
Statistical significance	^***	^***		^***
n	67	37	28	44	23

[i] The statistical significances are given as 10%, 5%, and 1%, respectively, corresponding to ^*, ^**, and ^***.

[ii] The second and third columns do not include combined offers, i.e., when some shares were sold in a private placement and some in a public one.

[iii] Source: Own study based on WSE yearbooks 2016–2020.

[iv] WSE, Warsaw Stock Exchange.

Table 4

Characteristics of the first offer rate of returns from the game and no-game sectors for subsequent years in the period of 2016–2020

		2016	2017	2018	2019	2020	2016–2020
Game sector	Debuts	5	2	7	8	10	32
	Underpricing	3	1	6	7	8	25
	Overpricing	2	1	1	1	2	7
	Mean (%)	25.7	−16.3	20.9^*	73.6^*	93.0^**	55.0^***
	Median (%)	22.0	−16.3	23.3	39.1	84.9	32.7
No-game sector	Debuts	20	23	11	7	6	67
	Underpricing	16	16	9	4	6	51
	No change	0	2	1	1	0	4
	Overpricing	4	5	1	2	0	12
	Mean (%)	24.1^**	27.6^***	45.5^*	47.1	217.3	48.5^***
	Median (%)	12.7	8.7	17.4	28.0	67.8	13.6

[i] Source: Own study based on WSE yearbooks 2016–2020.

[ii] WSE, Warsaw Stock Exchange.

Table 5

Regression results (1)

	All IPOs	Game IPOs	No-game IPOs
Game [1]\no-game [0]	0.225698 (1.691601)^*	-	-
Private [1]\public [0]	0.386802 (3.183515)^***	0.654334 (2.518507)^**	0.276035 (2.230298)^**
NewConnect [1]\WSE [0]	0.381886 (2.893440)^***	0.176881 (0.513660)	0.423386 (3.470867)^***
Year of IPO	0.137598 (3.141277)^***	0.216724 (2.296288)^**	0.067208 (1.261736)
WIG [D1]	1.047926 (0.118864)	−2.592949 (−0.130189)	2.148557 (0.244202)^*
WIG [D–1]	−5.629779 (−0.966431)	0.462730 (0.043916)	−10.58843 (−1.558410)
WIG [T–1]	−1.333989 (−0.437430)	3.440564 (0.496711)	−3.639609 (−1.213683)
WIG [M–1]	−1.685412 (−1.147583)	−1.495686 (−0.555861)	−1.976673 (−1.168461)
WIG.GAMES [D1]	−8.883673 (−1.346062)	−12.16628 (−1.467447)	9.211253 (0.848898)
WIG.GAMES [D–1]	9.098525 (1.673614)	13.13837 (1.610657)	−1.203189 (−0.198984)
WIG.GAMES [W–1]	4.423977 (1.613811)	6.805883 (1.572765)	−0.256893 (−0.090821)
WIG.GAMES [M–1]	0.292906 (0.219987)	0.852879 (0.355876)	−0451682 (−0.398930)
NCINDEX [D1]	1.235625 (0.221317)	6.259028 (0.717509)	−9.900088 (−1.255147)
NCINDEX [D–1]	−5.852847 (−1.740861)^*	−6.749160 (−1.486992)	4.135325 (0.505896)
NCINDEX [W–1]	0.719481 (0.309206)	0.313350 (0.080819)	2.081392 (0.687925)
NCINDEX M–1 [M–1]	1.740658 (1.842382)^*	1.666198 (1.198618)	1.170435 (0.702659)
The value of the offer	−1.18E−11 (−0.191373)	−2.16E−09 (−0.627552)	1.42E−12 (0.028054)
The capitalization of the company	8.80E−13 (0.062622)	−2.56E−10 (−0.471025)	3.43E−12 (0.296494)
The value of the shares introduced to the trading	1.16E−12 (0.082512)	−2.23E−10 (−0.409770)	3.62E−12 (0.313099)
The value of free float	7.45E−12 (0.145098)	−5.65E−10 (−0.295387)	1.73E−11 (0.448894)
N	97	32	65
Underpricing – mean	39.89%	55.01%	32.44%
Underpricing – SD	62.02%	78.31%	50.53%
Number of private IPOs	53	16	37
Number of public IPOs	44	16	28

[i] Source: Own study.

[ii] WSE, Warsaw Stock Exchange.

Table 6

Regression results (2)

	GIPOS – Private offers	GIPOs – Public offers	No-GIPOS – Private offers	No-GIPOS – Public offers
NewConnect [1]\WSE [0]	-	−0.335962 (−1.548574)	-	0.652091 (4.470154)^***
Year of IPO	0.247473 (1.563250)	0.162970 (2.227296)^**	−0.043191 (−0.454099)	0.153701 (3.497488)^***
WIG [D1]	5.228206 (0.124626)	−11.72320 (−0.857939)	25.61639 (1.964242)^*	−21.73320 (−2.529616)^**
WIG [D–1]	5.216321 (0.395991)	−30.11302 (−1.575983)	−3.482968 (−0.343858)	−19.48325 (−2.715175)^**
WIG [T–1]	10.66208 (0.943780)	0.936019 (0.158950)	−1.985592 (−0.449925)	−4.191893 (−1.180513)
WIG [M–1]	−8.617495 (−1.548601)	3.686187 (2.234503)^**	−1.604716 (−0.654016)	−2.029404 (−1.005749)
WIG.GAMES [D1]	−13.23927 (−1.332557)	3.092303 (0.172944)	−22.57897 (−1.367175)	−1.712193 (−0.092173)
WIG.GAMES [D–1]	14.88058 (1.463901)	−7.880833 (−0.656460)	−3.949185 (−0.903998)	−21.54909 (−1.469102)
WIG.GAMES [W–1]	7.684992 (1.046982)	2.511047 (0.716086)	−2.865255 (−1.256690)	−0.094838 (−0.019052)
WIG.GAMES [M–1]	−3.197250 (−0.390122)	1.291315 (1.056550)	−1.339054 (−2.357194)^*	3.829869 (1.525959)
NCINDEX [D1]	2.871421 (0.263108)	45.90438 (3.135237)^***	−14.64240 (−1.052499)	0.257850 (0.031096)
NCINDEX [D–1]	−6.640788 (−1.175878)	21.46843 (2.240100)^**	17.47464 (1.490351)	−16.05207 (−1.776898)^*
NCINDEX [W–1]	−1.692563 (−0.326314)	7.159107 (1.562447)	2.872322 (0.648556)	3.690085 (1.025435)
NCINDEX M–1 [M–1]	1.003331 (0.328602)	2.316720 (3.002314)^***	3.256832 (1.314066)	−0.277059 (−0.145136)
The value of the offer	−3.22E−08 (−0.310808)	1.16E−09 (0.540782)	−2.80E−08 (−2.407204)^**	3.11E−11 (0.784123)
The capitalization of the company	−9.77E−09 (−0.891123)	2.05E−10 (0.622635)	−4.37E−09 (−2.296425)^**	9.14E−12 (1.029754)
The value of the shares introduced to the trading	−2.06E−08 (−0.919658)	2.37E−10 (0.723325)	−5.15E−09 (−1.791981)^*	9.19E−12 (1.036916)
The value of free float	−1.48E−07 (−2.022439)^*	8.69E−10 (0.770001)	−1.72E−08 (−1.967373)^*	3.19E−11 (0.921920)
n	16	16	37	28
Underpricing – mean (%)	87.73	22.30	44.53	16.73
Underpricing – SD (%)	90.70	43.58	55.43	37.89
Number of private IPOs	16	0	0	28
Number of public IPOs	0	16	37	0

[i] Source : Own study.

[ii] WSE, Warsaw Stock Exchange; GIPOS, Game Initial Public Offering; IPO, Initial Public Offering; NC, NewConnect.

Table 7

Characteristics of the IPO rates of returns from the game and no-game sectors after 1M and 1Y from their debuts

	All game companies	Game companies: private offers	Game companies: public offers	Game companies: NewConnect	Game companies: Main Market
M1
Mean (%)	57.5	82.8	32.1	64.3	32.8
SD	0.9129986	1.12129	0.57303	1.009563	0.373363
t-Statistics	3.5599357	2.953819	2.24144	3.186955	2.327168
Statistical significance	^***	^***	^**	^***	^*
N	32	16	16	25	7
Y1
Mean (%)	86.8	124.9	45.6	101.9	26.6
SD	1.5153339	1.813899	1.031422	1.615579	0.901035
t-Statistics	2.8656941	2.483026	1.531832	2.821211	0.659583
Statistical significance	^***	^**		^**
n	25	13	12	20	5

	No-game companies	No-game companies: private offers	No-game companies: public offers	No-game companies: NewConnect	No-game companies: Main Market
M1
Mean (%)	39.3	34.6	29.2	55.8	8.5
SD	0.95514002	0.745913	0.851727	1.143894	0.213319
t-Statistics	3.34354364	2.782819	1.816058	3.196773	1.921225
Statistical significance	^***	^***	^*	^***	^*
n	66	36	28	43	23
Y1
Mean (%)	57.2	87.0	23.7	90.2	−4.0
SD	2.0659316	2.496368	1.1270009	2.462339	0.682876
t-Statistics	2.1450145	2.09152	1.0307249	2.286424	−0.26624
Statistical significance	^**	^**		^**
n	60	36	24	39	21

[i] The statistical significances of 10%, 5%, and 1%, respectively, are indicated by ^*, ^**, and ^***.

[ii] The second and third columns do not include combined offers, i.e., when some shares were sold in a private placement and some in a public one.

[iii] 1M: 1 month; 1Y: 1 year.

Comparison of the IPO rates of returns from the game and no-game sectors on the first day of quotation and after 1M and 1Y from their debuts. D1: day of the debut; M1: 1 month after the debut; Y1: 1 year after the debut.

Table 8

Trading volumes for IPOs in the game and non-game sectors at D1, M1, and Y1

	All game companies	Game companies: private offers	Game companies: public offers	Game companies: NewConnect	Game companies: Main Market
D1
Mean	301,399	392,770.13	210,028.38	302,120.24	298,824.29
SD	324,138.2165	383,423.80	228,716.65	340,636.188	280,529.67
t-Statistics	5.26001422	4.097503876	3.6731629	4.43464685	2.818293
Statistical significance	^***	^***	^***	^***	^**
n	32	16	16	25	7
M1
Median	47,356.26	49,809.42	25,252.60	34,647.57	65,907.36
Mean	46,110	65,481.96	38,200.14	50,551.74	56,445.72
SD	64,024.69073	70,470.72	35,322.09479	61,516.64934	36,850.69
t-Statistics	4.074008224	3.716832367	4.325920183	4.108785612	4.052607
Statistical significance	^***	^***	^***	^***	^***
n	32	16	16	25	7
Y1
Mean	21,799	32,078.55	10,088.99	22,219.54	18,739.66
SD	24,961.54411	26,106.18	13,673.27731	24,969.7522	18,422.20
t-Statistics	4.366518793	4.430402103	2.556028617	3.97956683	2.274601
Statistical significance	^***	^***	^**	^***	^*
n	25	13	12	20	5

	No-game companies	No-game companies: private offers	No-game companies: public offers	No-game companies:	No-game companies: Main Market
D1
Mean	1,682,788.53	264,882.69	3,616,701.90	242,531	4,375,444.09
SD	7,967,161.488	687,115.736	12,060,749.3	633,481	13,234,094.7
t-Statistics	1.728873927	2.34490122	1.58678263	2.53956804	1.58559337
Statistical significance	^*	^**		^**
n	67	37	28	44	23
M1
Mean	273,144.88	125,825.75	479,961.58	108,894	580,222.98
SD	1,153,059.543	435,097.9301	1,696,355.2	399,257	1,863,483.4
t-Statistics	1.924479554	1.73513692	1.4971616	1.78848255	1.4932528
Statistical significance	^*	^*		^*
n	66	36	28	43	23
Y1
Mean	41,138.96	25,143.03	65,132.87	23,364	74,150.33
SD	104,656.6287	71,163.42	139,245.0352	68,584	147,016.8
t-Statistics	3.044824247	2.119884	2.291532867	2.12741262	2.311296
Statistical significance	^***	^**	^**	^**	^**
n	60	36	24	39	21

[i] Source: Own study.

[ii] 1D: day of the debut; 1M: 1 month after debut; 1Y: 1 year after debut.

[iii] The statistical significances are given as 10%, 5%, and 1%, respectively, corresponding to ^*, ^**, and ^***.

References

Authors

Metrics

Articles in this issue

DOI: https://doi.org/10.2478/ijme-2022-0024 | Journal eISSN: 2543-5361 (formerly 2299-9701) | Journal ISSN: 2299-9701

Journal RSS Feed

Language: English

Page range: 335 - 350

Submitted on: Dec 8, 2021

Accepted on: Nov 4, 2022

Published on: Dec 31, 2022

Published by: SGH Warsaw School of Economics

In partnership with: Paradigm Publishing Services

Publication frequency: 4 issues per year

Keywords:

behavioral biases,

game industry,

IPO underpricing

JEL:

G41,

G11,

G12

Related subjects:

Business and economics,

Business management,

Management accounting, financial controlling, cost calculation, investment

© 2022 Paweł Śliwiński, Szymon Ablewski, Kamil Gemra, Michał Łukowski, published by SGH Warsaw School of Economics
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

Volume 58 (2022): Issue 4 (December 2022)

Where is the missing value? Evidence from the game industry IPOs underpricing in Poland

Figures & Tables

Figure 1

Table 1

Figure 2

Table 2

Table 3

Table 4

Table 5

Table 6

Table 7

Figure 3

Table 8

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