Does Rationing of Shares Increase Revenues in Initial Public O®erings?
نویسنده
چکیده
We provide a new explanation for the apparent underpricing of initial public o®erings applicable to large, regulated ̄rms like telecommunications companies. Under the assumption that regulation is subject to political pressure by voters we demonstrate that it may be rational for issuers to ration investors in order to insure a broad distribution of shares in the population. At the same time we explain the common practice of bonus systems designed to prevent investors from taking pro ̄ts immediately. JEL{ classi ̄cation numbers: G24, L96, D72. ¤Department of Economics, Humboldt University, Spandauer Str. 1, 10178 Berlin, Germany, FAX: +49{30{2093{5619, E{mail: [email protected], [email protected]
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