Measuring the information environment of firms using analyst (price) forecast bias and forecast dispersion before listing, we empirically examine the interactive influence of the information environment and market-wide sentiment on the initial returns of initial public offerings (IPOs). We find...

Using content analysis we measure the impact of soft information, derived from words in IPO registration documents, on IPO pricing efficiency. First, using 2,298 U.S. IPOs from 1996 to 2008, we find that an IPO document's strategic tone correlates positively with the stock's first-day return;...

We document a strong low-price effect for Chinese initial public offerings (IPOs). Namely, IPOs with low offer prices have higher initial returns, followed by even stronger after-market performance. This low-price effect cannot be fully explained by risks and IPO undervaluation. A long-only...

This paper separates the amount of IPO underpricing (primary market underpricing) and overvaluation (secondary market overvaluation) from the value of an IPO’s initial return to evaluate the relative importance of these two factors and their main determinants. Using data on the IPOs of 948...

We investigate the effects of individual investors' participation on after-market divergence of opinion (DOP) for 269 Malaysian fixed-price initial public offerings (IPOs). Our findings show that individual investor participation moderates the relationship between initial performance and...

A lock-up agreement ensures that major shareholders retain significant economic interest in the companies following the IPOs. Rationally, these insiders will not adhere to the lock-up agreement unless the benefits of doing so can more than offset the costs. Therefore, in an environment...

This paper studies the impact of investor sentiment on the probability of firms conducting seasoned equity offerings (SEOs) and on stock performance around and subsequent to SEOs. We first show that investor sentiment is positively related to SEO probability, and that small, high volatility,...

We find that companies listed on China’s A-share market have a strong stock price performance within a month after IPO, and underperform a month later. Such a conclusion on the post-IPO performance is quite different from the prior research. We believe the phenomenon is mainly generated by...

This paper studies how institutional characteristics of Specified Purpose Acquisition Companies (SPACs) are related to their post-merger survival. SPACs are unique financial firms that conduct the IPO with the solely purpose to use the proceeds to acquire another private company. Paper finds...

Background: When a privately owned firm or privatized government entity raises capital by selling its stocks for the first time to general public, is known as initial public offering (IPO). The underpricing phenomenon and ownership structure are important characteristics of IPO process that...