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The Underpricing Of Ipos Of Financial Institutions

Author

Listed:
  • Kasim Alli
  • Jot Yau
  • Kenneth Yung

Abstract

This paper examines the underpricing of IPOs of financial institutions over the period 1983 to 1987. Based on a sample of 185 banks and savings and loan associations (including S&L conversions) and a control sample of 1,361 industrial firms, results indicate that in general IPOs of financial institutions are significantly less underpriced than those of the non‐financial institutions. In particular, the IPOs of non‐S&L conversion financial institutions are less underpriced than the IPOs of non‐financial institutions.

Suggested Citation

  • Kasim Alli & Jot Yau & Kenneth Yung, 1994. "The Underpricing Of Ipos Of Financial Institutions," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 21(7), pages 1013-1030, October.
    • Handle: RePEc:bla:jbfnac:v:21:y:1994:i:7:p:1013-1030
    DOI: 10.1111/j.1468-5957.1994.tb00361.x
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    References listed on IDEAS

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    1. Logue, Dennis E., 1973. "On the Pricing of Unseasoned Equity Issues: 1965–1969," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 8(1), pages 91-103, January.
    2. Beatty, Randolph P. & Ritter, Jay R., 1986. "Investment banking, reputation, and the underpricing of initial public offerings," Journal of Financial Economics, Elsevier, vol. 15(1-2), pages 213-232.
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    4. Wansley, James W & Dhillon, Upinder S, 1989. "Determinants of Valuation Effects for Security Offerings of Commercial Bank Holding Companies," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 12(3), pages 217-233, Fall.
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    6. Baron, David P, 1982. "A Model of the Demand for Investment Banking Advising and Distribution Services for New Issues," Journal of Finance, American Finance Association, vol. 37(4), pages 955-976, September.
    7. Carter, Richard B & Manaster, Steven, 1990. "Initial Public Offerings and Underwriter Reputation," Journal of Finance, American Finance Association, vol. 45(4), pages 1045-1067, September.
    8. John Affleck-Graves & Robert E. Miller, 1989. "Regulatory And Procedural Effects On The Underpricing Of Initial Public Offerings," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 12(3), pages 193-202, September.
    9. Barry, Christopher B. & Brown, Stephen J., 1984. "Differential information and the small firm effect," Journal of Financial Economics, Elsevier, vol. 13(2), pages 283-294, June.
    10. Mark Grinblatt & Chuan Yang Hwang, "undated". "Signalling and the Pricing of Unseasoned New Issues," Rodney L. White Center for Financial Research Working Papers 01-89, Wharton School Rodney L. White Center for Financial Research.
    11. Bradford D. Jordan & James A. Verbrugge & Richard M. Burns, 1988. "Returns to Initial Shareholders in Savings Institution Conversions: Evidence and Regulatory Implications," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 11(2), pages 125-136, June.
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    13. Allen, Franklin & Faulhaber, Gerald R., 1989. "Signalling by underpricing in the IPO market," Journal of Financial Economics, Elsevier, vol. 23(2), pages 303-323, August.
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    16. repec:bla:jfinan:v:44:y:1989:i:2:p:393-420 is not listed on IDEAS
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