The underpricing of initial public offerings and the partial adjustment phenomenon
نویسندگان
چکیده
منابع مشابه
Employee Stock Options and the Underpricing of Initial Public Offerings
The central question surrounding the IPO underpricing puzzle is why issuers are willing to sell their shares at a price that is less than what the market is willing to pay. This paper shows that a major reason why managers are willing to underprice shares at IPO is that they use options and stock grants to protect themselves from the dilution to their existing shares. Underpricing can have a la...
متن کاملEmployee Stock Options and the Underpricing of Initial Public Offerings
The central question surrounding the IPO underpricing puzzle is why issuers are willing to sell their shares at a price that is less than what the market is willing to pay. This paper shows that a major reason why managers are willing to underprice shares at IPO is that they use options and stock grants to protect themselves from the dilution to their existing shares. Underpricing can have a la...
متن کاملThe Determinants of Underpricing: Initial Public Offerings on the Neuer Markt and the Nouveau Marché
This paper analyses the determinants of underpricing of firms that went public on the Nouveau Marché between 1996 and 2000 and on the Neuer Markt between 1997 and 2000. Evidence suggests that firms that went public on the Nouveau Marché experienced lower underpricing than their counterparts that went public on the Neuer Markt. This difference in underpricing is partly explained by the different...
متن کاملValuation and Underpricing of Initial Public Offerings: Role of Discretionary Accounting Accruals
This study examines the role of pre-IPO discretionary accruals in the valuation and underpricing of IPOs. We find that IPO offer price is unaffected whereas market closing price is positively associated with the levels of pre-IPO discretionary accruals for issuers with aggressively reported earnings. We also find that this relative over-valuation of managed earnings by the markets explains a po...
متن کاملUnderpricing and Long-Term Performance of Initial Public Offerings at Germany ́s
This is the first large-scale examination of initial public offerings in the German market segment Neuer Markt. As such, it represents a powerful sample to examine the pricing process and long-run performance of the 325 initial public offerings taking place between 1997 and 2001 at the Neuer Markt. The initial returns seem to be higher in the “New Economy”; we find an mean initial return of 49....
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ژورنال
عنوان ژورنال: Journal of Financial Economics
سال: 1993
ISSN: 0304-405X
DOI: 10.1016/0304-405x(93)90019-8