Capital raising by Australian biotechnology IPOs: Underpricing, money left and proceeds raised

The phenomenon of IPO underpricing and issuing companies leaving money on the table is observed across the world A major issue is around IPO underpricing for high technology companies. This paper analyses IPOs for Australian biotechnology companies. We find significant relationships exist between prospectus information and IPO capital raising success and that money left on the table at IPO (a capital raising argument) is more important than the underpricing returns themselves. We compare our results to those of Deeds, Decarolis and Coombs. (1997) for US biotechnology capital raisings and outline the reasons underlying similarities and differences.