Equity valuation in the Czech voucher privatization auctions

This is a study of the determinants of share pricing and demand in the path -breaking Czech voucher-based multiple-round mass privatization auction. Th e results presented here document that share valuation and demand in this a uction were based on firm characteristics such as return on sales, sales gr owth, and ownership structure in the early rounds. However, such informatio n declined in importance while auction results on share prices and trading volumes fi-om prior rounds increased in importance as determinants of share prices and demand in later rounds. While share prices overshot or undersho t in the early rounds, by round four they had stabilized and the market cle ared successfully by the fifth and final round. These results are new evide nce on the price discovery process in the Czech privatization auction and c onfirm the success of this auction in the efficient pricing and equitable d istribution of enterprise shares.