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IPO Pricing with Bookbuilding and a When-Issued Market

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Author Info
Aussenegg, Wolfgang
Pichler, Pegaret
Stomper, Alex
Abstract

We study IPO pricing in Germany to determine whether when-issued trading provides information that is useful for setting IPO offer prices, and whether such trading supplants bookbuilding as a source of information. We find that when-issued trading reveals relevant information for pricing IPOs, and that, once when-issued trading has begun, bookbuilding is not a source of costly information for pricing. But bookbuilding does not appear to be fully supplanted as a source of pricing information. We find evidence consistent with bookbuilding being used to gather information prior to the onset of when-issued trading.

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Publisher Info
Article provided by Cambridge University Press in its journal Journal of Financial and Quantitative Analysis.

Volume (Year): 41 (2006)
Issue (Month): 04 (December)
Pages: 829-862
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Handle: RePEc:cup:jfinqa:v:41:y:2006:i:04:p:829-862_00

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  1. Renneboog, L.D.R. & Spaenjers, C., 2008. "The Dutch Grey Market," Discussion Paper 2008-88, Tilburg University, Center for Economic Research. [Downloadable!]
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This page was last updated on 2009-12-14.


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