Opportunity Windows for IPOS
a Study of Brazilian Technology Companies During the Pandemic
DOI:
https://doi.org/10.16930/2237-766220243508Keywords:
Equity Market Timing Theory, Capital structure, Covid-19 pandemicAbstract
This study investigates whether technology companies in Brazil used initial public offerings (IPOs) opportunistically as a source of financing during the Covid-19 pandemic. Using a quantitative approach, the study analyzed financial information from 16 companies, including 12 that conducted IPOs in the technology sector, based on data from the Economatica platform, covering the period from 2017 to 2022. Descriptive results showed that during "hot" market periods, companies exhibited lower financial leverage and higher Market-to-Book ratios and Size indices, whereas in "cold" market periods, they showed higher financial leverage and lower Market-to-Book ratios and Size indices. In the regression analysis of financial leverage, the only variables that showed statistical significance were Profitability and Tangibility. The lack of significance in other variables highlights the complexity of identifying consistent determinants for growth and financial leverage in the Brazilian context, as observed in previous studies by Mendes and Kayo (2004) and Steffen and Zanini (2014). The regression analysis on growth indicated that the period (hot/cold), Market-to-Book ratio, and Tangibility were statistically significant, suggesting that these variables influence the growth of the analyzed companies. The results suggest that the Equity Market Timing theory does not clearly apply to the Brazilian technology sector, both before and during the pandemic. External changes influence company financing, indicating the need to consider additional variables in future research.
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