Signaling in the Internet craze of initial public offerings
نویسندگان
چکیده
منابع مشابه
Signalling in the Internet Craze of Initial Public Offerings∗
In this paper we analyze the clustering phenomenon of underpricing in initial public offerings (IPOs), where firms in a particular industry choose to issue their new shares at the same time and at great discounts. The industry consists of many firms that have private information about their own qualities (high or low) and that must raise external capital first before production. In the product ...
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Security Design in Initial Public Offerings
We investigate an IPO security design problem when information asymmetries across investors lead to a winner’s curse. Firms that are riskier in down markets can lower the cost of going public by using unit IPOs, in which equity and warrants are combined into a non-divisible package. Furthermore, firms that have a sizeable growth potential even in bad states of the world can fully eliminate the ...
متن کاملUnderwriter Manipulation in Initial Public Offerings
We provide a new explanation for the extremely high level of initial public offering (IPO) underpricing during the Internet bubble years of the late 1990s based on the allocation practices of underwriters. By requiring their customers to buy the stock in the aftermarket in return for IPO allocations (a tie-in agreement), the underwriters created artificial excess demand for the IPOs, leading to...
متن کاملExplaining Mispricing of Initial Public Offerings
This study examines the relative importance of underpricing as a signal of firm value, underwriter certification, subscription levels of shares on offer, and uncertainty surrounding firm value on mispricing of initial public offerings. A sample of 100 Singaporean initial public offerings (IPOs) during the period 1998-2000 indicates that subscription levels of shares on offer have the most signi...
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ژورنال
عنوان ژورنال: Journal of Corporate Finance
سال: 2006
ISSN: 0929-1199
DOI: 10.1016/j.jcorpfin.2005.11.001