Partial Adjustment to Public Information and IPO Underpricing
Top Cited Papers
- 1 December 2002
- journal article
- Published by JSTOR in Journal of Financial and Quantitative Analysis
- Vol. 37 (4)
- https://doi.org/10.2307/3595013
Abstract
We examine the extent to which offer prices reflect public information for 3,325 IPOs over the period 1990-1999. We focus primarily on four variables: share overhang, file range amendments, venture capital backing, and previous issue underpricing. We show that 35%-50% of the variation in IPO underpricing can be predicted using public information known before the offer date and therefore conclude that IPO offer prices underadjust to widely available public information to a much greater extent than previously documented.Keywords
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