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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