Literature Review Women on boards and in TMTS and firm performance 101 orientation in the future allowing us to remain independent of developments in specific seg ments or the prevailing climate in individual mar kets CONERGY AG 2005 p 17 However reaching new technologies by own me ans usually means a long term process with un certain outcomes CEO Rueter decided that hori zontal diversification should be achieved through focused acquisitions of companies with expertise in complementary technologies in Germany and worldwide CONERGY AG 2005 4 5 4 Abundant internal resources Rueter was in need of additional funds in order to finance his ambitious growth and diversification strategy From a behavioral finance perspective CEO Rueter clearly being a optimistic manager should have preferred internal financing rather than accessing capital markets Harford 1999 He aton 2002 Malmendier Tate 2005 However albeit the past successful years CONERGY s capital cover was too thin and left Rueter little choice In 2005 Rueter opened up new sources of funding by floating the company shares on the stock market Timing was right given the bullish view of several research analysts on solar energy Titled the rise of a new power generation one report judged the political support to enable the industry to develop into a self sustaining multi billion euro industry Citigroup Equity Research 2005 June 3 Germa ny leading the field followed by markets like Italy and Spain China or the United States The CAGR for the installation of new PV systems was estimated at 20 25 percent Citigroup Equity Research 2005 June 3 or 25 31 percent Deutsche Bank Company Research 2005 April 27 until 2010 and valuated to be economically sustainable for ten up to 20 ye ars The key objective for the industry becoming competitive and thereby independent of political support was estimated to be achieved between 2010 and 2020 Analysts named as key risks the ongoing silicon supply shortage being the raw ma terial for the major part of PV products second the industry s dependence on subsidies and therefore thirdly adverse changes in political support First Berlin Equity Research 2005 April 6 With respect to CONERGY leading analysts in 2005 expected the company to achieve a top line compound annual growth rate CAGR of 50 percent until 2007 Deut sche Bank Company Research 2005 April 27 The initial public offering IPO was an outstanding success CONERGY listed its shares for trading on the Official Market at the Frankfurt Stock Exchange on March 17 2005 Due to a monumental over subscription by 29 times even at the upper range issue price of EUR 54 0 CONERGY was unable to fully satisfy all allocation requests The first tra ding price was EUR 71 0 up 32 percent The net issuing proceeds amounted to some EUR 100 mil lion As the company had no net debt at that time CONERGY intended to invest the IPO proceeds for the continuation of its diversification and inter nationalization strategy focused on the most re munerative international markets for solar power This stated objective is in line with the findings of Harford 1999 as well as Malmendier and Tate 2005 stating that internal funds are likely to further stimulate acquisition activities showing that firms with abundant internal resources show a greater willingness to attempt acquisitions than other firms and they are more inclined to make diversifying acquisitions Already three months after the IPO the CONER GY share gained a fast entry listing in the TecDAX the index for the 30 largest German technology issues with a positive effect on the awareness of investors and research analysts for CONERGY Until the end of the year the share price increased to CEO optimism and overconfidence

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