Expectation Management in Public Offering Companies: Price Determination Reports Case Analysis

Abstract

Purpose – In 2020, the pandemic increased the demand for IPOs in Turkey as well as in the world. This study investigates whether the expectations of analysts and brokerage firms in the Turkish stock market are optimistic or pessimistic and whether these expectations have been realized over the years after the IPO, and investigates whether the market has an efficient ecosystem. Optimistic expectations and incorrect pricing in estimates question the efficiency of the market for foreign investors.
Design/methodology/approach – In the study, the content analysis method, which is one of the qualitative and quantitative research methods, was used and data was collected with the document review technique. In the study, the profitability expectations in 144 price determination reports written by brokerage firms and published on the Public Disclosure Platform (KAP) for 144 companies that went public for the years 2021, 2022, 2023, and 2024 were examined in terms of realization rates according to 204 assumption reports published on the Public Disclosure Platform (KAP) in the following 2 years, and successful and unsuccessful brokerage firms were tried to be determined by the scoring method.
Results – The study revealed that the brokerage firms’ estimates were largely realized in the last 4 years and the deviation was generally on the positive side, while different results were reached based on brokerage firms and years. The Turkish stock market seems to be working more efficiently than expected. İnfo Yatırım and Deniz Yatırım stood out as the most successful brokerage firms. It was concluded that the expectation realizations in the first year were better than the expectation realizations in the second year.
Discussion – When the literature review on public offerings was conducted, it was noted that there was no such method to measure expectations regarding the efficiency of the market in the relevant studies. This study provides an idea about the efficiency of the Turkish stock market to domestic and foreign investors, while also providing guiding results on the basis of intermediary institutions for the CMB, which is responsible for protecting investor rights when these expectations deviate.