Making Sense of Preclinical IPOs in Post-Financial Crisis Era: A Temporality Analysis (2008-2020)

Yu-Ching (Julia) Cheng, Northwestern University

This paper looks into processes of making investor sentiment for the biotech IPO market mostly trading preclinical innovations through the lens of temporality. Consistent with an overall positive facade orientation shown in the literature, it argues that evaluations’ temporal frame enables and constrains the processes of generating optimism and the ways of establishing causality between facts of past and value of future. Drawing on preclinical IPO evaluations since 2008 to date, this paper finds pre-IPO temporality narrative generally constructed IPO price performance as the effect of the market’s transition to the post-financial crisis era, whereas post- IPO one tended to view successful IPOs as the cause of innovation value of future. When generating optimism for failed IPOs, evaluators blended in counter-facts surrounding institutional investors’ contrasting decision to de-legitimate the market’s action. This paper shows dynamic of making investor sentiment and suggests the constructed nature of the market.

See paper

 Presented in Session 73. Financial Markets