IPO Pricing in the Dot-com Bubble
IPO initial returns reached astronomical levels during 1999-2000. We show that the regime shift in initial returns and other elements of pricing behavior can be at least partially accounted for by a variety of 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 1999-2000 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.
Year of publication: |
2002-04-01
|
---|---|
Authors: | Wilhelm, William ; Ljungqvist, Alexander |
Institutions: | Department of Economics, Oxford University |
Saved in:
Saved in favorites
Similar items by person
-
IPO Allocations: Discriminatory or Discretionary?
Wilhelm, William, (2001)
-
The Seven Percent Solution? An International Perspective on Underwriting Spreads
Wilhelm, William, (1999)
-
A Theory of the Syndicate: Form Follows Function
Wilhelm, William, (2001)
- More ...