IPO Pricing in the Dot-com Bubble
IPO underpricing reached astronomical levels during 1999 and 2000. We show that the regime shift in initial returns and other elements of pricing behavior can be at least partially accounted for by marked changes in pre-IPO ownership structure and insider selling behavior over the period, which reduced key decision makers' incentives to control underpricing. After controlling for these changes, the difference in underpricing between 1999 and 2000 and the preceding three years is much reduced. Our results suggest that it was firm characteristics that were unique during the "dot-com bubble" and that pricing behavior followed from incentives created by these characteristics. Copyright 2003 by the American Finance Association.
Year of publication: |
2003
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Authors: | Ljungqvist, Alexander ; Wilhelm, William J. |
Published in: |
Journal of Finance. - American Finance Association - AFA, ISSN 1540-6261. - Vol. 58.2003, 2, p. 723-752
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Publisher: |
American Finance Association - AFA |
Saved in:
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