Initial Public Offerings: Investor Behavior and Underpricing
A questionnaire survey of investors in initial public offerings (IPO's) was undertaken to learn about patterns of investor behavior that might be relevant to theories of their underpricing. Respondents were asked for their perception of the allocation process, their concern with stockbroker or underwriter reputation, their theories of IPO underpricing, and their communications and information sources. Results are interpreted as supporting the notion that there is an element of truth in some existing theories of IPO underpricing. and also suggesting different hypotheses. The impresario hypothesis is that underwriters deliberately underprice to obtain publicity and promote enthusiasm. Other hypotheses suggested by the results are an investor risk perception hypothesis and a fairness-relationship hypothesis.
|Date of creation:||Dec 1988|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
Web page: http://www.nber.org
More information through EDIRC
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.:
- Tinic, Seha M, 1988. " Anatomy of Initial Public Offerings of Common Stock," Journal of Finance, American Finance Association, vol. 43(4), pages 789-822, September.
- Shefrin, Hersh & Statman, Meir, 1985. " The Disposition to Sell Winners Too Early and Ride Losers Too Long: Theory and Evidence," Journal of Finance, American Finance Association, vol. 40(3), pages 777-790, July.
- Rock, Kevin, 1986. "Why new issues are underpriced," Journal of Financial Economics, Elsevier, vol. 15(1-2), pages 187-212.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:2806. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.