The Informational Content of Initial Public Offerings
AbstractThe ability of capital markets to distinguish firms of different value by the size of their initial equity offerings is attenuated when insiders can sell equity more than once. A model is developed in which there is price risk from holding equity between periods. When the uncertainty is small, there must be pooling in the first period. When uncertainty is large, the pooling equilibria dominate the separating equilibria. Copyright 1989 by American Finance Association.
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Bibliographic InfoArticle provided by American Finance Association in its journal Journal of Finance.
Volume (Year): 44 (1989)
Issue (Month): 2 (June)
Other versions of this item:
- Ian Gale & Joseph Stiglitz, 1990. "The Informational Content of Initial Public Offerings," NBER Working Papers 3259, National Bureau of Economic Research, Inc.
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- Klaus Ritzberger & Frank Milne, 2002. "Strategic pricing of equity issues," Economic Theory, Springer, vol. 20(2), pages 271-294.
- Cantale, Salvatore & Russino, Annalisa, 2004. "Putable common stock," Journal of Corporate Finance, Elsevier, vol. 10(5), pages 753-775, November.
- Lee, Philip J. & Taylor, Stephen L. & Walter, Terry S., 1996. "Expected and realised returns for Singaporean IPOs: Initial and long-run analysis," Pacific-Basin Finance Journal, Elsevier, vol. 4(2-3), pages 153-180, July.
- Firth, Michael, 1997. "An analysis of the stock market performance of new issues in New Zealand," Pacific-Basin Finance Journal, Elsevier, vol. 5(1), pages 63-85, February.
- Keasey, Kevin & McGuinness, Paul B., 2008. "Firm value and its relation to equity retention levels, forecast earnings disclosures and underpricing in initial public offerings in Hong Kong," International Business Review, Elsevier, vol. 17(6), pages 642-662, December.
- Lee, Philip J. & Taylor, Stephen L. & Walter, Terry S., 1996. "Australian IPO pricing in the short and long run," Journal of Banking & Finance, Elsevier, vol. 20(7), pages 1189-1210, August.
- Fei Jiang & Lawrence A. Leger, 2010. "The impact on performance of IPO allocation reform: An event study of Shanghai Stock Exchange A-shares," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 2(3), pages 251-272, August.
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