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The implications of IPO underpricing for the firm and insiders: Tests of asymmetric information theories

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  • Kennedy, Duane B.
  • Sivakumar, Ranjini
  • Vetzal, Kenneth R.
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Empirical Finance.

    Volume (Year): 13 (2006)
    Issue (Month): 1 (January)
    Pages: 49-78

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    Handle: RePEc:eee:empfin:v:13:y:2006:i:1:p:49-78

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    Web page: http://www.elsevier.com/locate/jempfin

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    References

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    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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    1. Alon Brav & Paul A. Gompers, 2003. "The Role of Lockups in Initial Public Offerings," Review of Financial Studies, Society for Financial Studies, vol. 16(1), pages 1-29.
    2. Helwege, Jean & Liang, Nellie, 2004. "Initial Public Offerings in Hot and Cold Markets," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 39(03), pages 541-569, September.
    3. Jay Ritter & Ivo Welch, 2002. "A Review of IPO Activity, Pricing, and Allocations," NBER Working Papers 8805, National Bureau of Economic Research, Inc.
    4. Daniel J. Bradley & Bradford D. Jordan & Jay R. Ritter, 2003. "The Quiet Period Goes out with a Bang," Journal of Finance, American Finance Association, vol. 58(1), pages 1-36, 02.
    5. Slovin, Myron B. & Sushka, Marie E. & Bendeck, Yvette M., 1994. "Seasoned common stock issuance following an IPO," Journal of Banking & Finance, Elsevier, vol. 18(1), pages 207-226, January.
    6. Welch, Ivo, 1989. " Seasoned Offerings, Imitation Costs, and the Underpricing of Initial Public Offerings," Journal of Finance, American Finance Association, vol. 44(2), pages 421-49, June.
    7. Welch, Ivo, 1996. "Equity offerings following the IPO theory and evidence," Journal of Corporate Finance, Elsevier, vol. 2(3), pages 227-259, February.
    8. Lowry, Michelle & Schwert, G. William, 2004. "Is the IPO pricing process efficient?," Journal of Financial Economics, Elsevier, vol. 71(1), pages 3-26, January.
    9. Michael T. Cliff & David J. Denis, 2004. "Do Initial Public Offering Firms Purchase Analyst Coverage with Underpricing?," Journal of Finance, American Finance Association, vol. 59(6), pages 2871-2901, December.
    10. William F. Maxwell & Clifford P. Stephens, 2003. "The Wealth Effects of Repurchases on Bondholders," Journal of Finance, American Finance Association, vol. 58(2), pages 895-920, 04.
    11. Jung, Kooyul & Yong-Cheol, Kim & Stulz, Rene M., 1996. "Timing, investment opportunities, managerial discretion, and the security issue decision," Journal of Financial Economics, Elsevier, vol. 42(2), pages 159-185, October.
    12. Jenkinson, Tim & Ljungqvist, Alexander, 2001. "Going Public: The Theory and Evidence on How Companies Raise Equity Finance," OUP Catalogue, Oxford University Press, edition 2, number 9780198295990.
    13. Lee, Inmoo, 1997. " Do Firms Knowingly Sell Overvalued Equity?," Journal of Finance, American Finance Association, vol. 52(4), pages 1439-66, September.
    14. Hanley, Kathleen Weiss, 1993. "The underpricing of initial public offerings and the partial adjustment phenomenon," Journal of Financial Economics, Elsevier, vol. 34(2), pages 231-250, October.
    15. Rock, Kevin, 1986. "Why new issues are underpriced," Journal of Financial Economics, Elsevier, vol. 15(1-2), pages 187-212.
    16. Tim Loughran & Jay Ritter, 2004. "Why Has IPO Underpricing Changed Over Time?," Financial Management, Financial Management Association, vol. 33(3), Fall.
    17. Laura Casares Field, 2001. "The Expiration of IPO Share Lockups," Journal of Finance, American Finance Association, vol. 56(2), pages 471-500, 04.
    18. Michel Habib & Alexander Ljungqvist, 1999. "Underpricing and Entrepreneurial Wealth Losses in IPOs: Theory and Evidence," OFRC Working Papers Series 1999fe03, Oxford Financial Research Centre.
    19. Benveniste, Lawrence M. & Spindt, Paul A., 1989. "How investment bankers determine the offer price and allocation of new issues," Journal of Financial Economics, Elsevier, vol. 24(2), pages 343-361.
    20. Aggarwal, Rajesh K. & Krigman, Laurie & Womack, Kent L., 2002. "Strategic IPO underpricing, information momentum, and lockup expiration selling," Journal of Financial Economics, Elsevier, vol. 66(1), pages 105-137, October.
    21. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
    22. Chemmanur, Thomas J, 1993. " The Pricing of Initial Public Offerings: A Dynamic Model with Information Production," Journal of Finance, American Finance Association, vol. 48(1), pages 285-304, March.
    23. Michaely, Roni & Shaw, Wayne H, 1994. "The Pricing of Initial Public Offerings: Tests of Adverse-Selection and Signaling Theories," Review of Financial Studies, Society for Financial Studies, vol. 7(2), pages 279-319.
    24. Jegadeesh, Narasimhan & Weinstein, Mark & Welch, Ivo, 1993. "An empirical investigation of IPO returns and subsequent equity offerings," Journal of Financial Economics, Elsevier, vol. 34(2), pages 153-175, October.
    25. van Bommel, Jos & Vermaelen, Theo, 2003. "Post-IPO capital expenditures and market feedback," Journal of Banking & Finance, Elsevier, vol. 27(2), pages 275-305, February.
    26. Katherine Spiess, D. & Pettway, Richard H., 1997. "The IPO and first seasoned equity sale: Issue proceeds, owner/managers' wealth, and the underpricing signal," Journal of Banking & Finance, Elsevier, vol. 21(7), pages 967-988, July.
    27. Carter, Richard B & Manaster, Steven, 1990. " Initial Public Offerings and Underwriter Reputation," Journal of Finance, American Finance Association, vol. 45(4), pages 1045-67, September.
    28. van Bommel, Jos, 2002. "Messages from market to management: the case of IPOs," Journal of Corporate Finance, Elsevier, vol. 8(2), pages 123-138, March.
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    Cited by:
    1. Sibylle Lehmann, 2011. "Taking Firms to the Stock Market: IPOs and the Importance of Universal Banks in Imperial Germany 1896-1913," Cologne Economic History papers 9, University of Cologne, Department of Economic and Business History, revised Mar 2011.
    2. Jan Hanousek & Evžen Kočenda & Jan Novotný, 2013. "Price Jumps on European Stock Markets," William Davidson Institute Working Papers Series wp1059, William Davidson Institute at the University of Michigan.
    3. Hsuan-Chi Chen & Robert Fok & Sheng-Hung Kang, 2010. "Issuers’ incentives and tests of Baron’s model of IPO underpricing," Review of Quantitative Finance and Accounting, Springer, vol. 35(1), pages 71-87, July.

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