In the 1980s, the average first-day return on initial public offerings (IPOs) was 7%. The average first-day return doubled to almost 15% during 1990-1998, before jumping to 65% during the internet bubble years of 1999-2000 and then reverting to 12% during 2001-2003. We attribute much of the...

We review the theory and evidence on IPO activity: why firms go public, why they reward first-day investors with considerable underpricing, and how IPOs perform in the long run. Our perspective on the literature is three-fold: First, we believe that many IPO phenomena are not stationary. Second,...

For a large sample of initial public offerings of common stock, insider holdings are positively related to market value/book value ratios. Three hypotheses are presented to explain this relation: (i) insider holdings signal relative firm value, (ii) an agency relation is present, so that firms...

IPO stock prices increased approximately 2.3% on the first day of secondary market trading over the period 1993 through 2003. While these aftermarket returns are accentuated during 1999 and 2000, they persist after the bubble burst and even increase as a percentage of total underpricing. We...

We examine the costs to higher education employees investing in optional retirement plans (ORP). We find vast differences across states in terms of the number of providers, number of funds offered per provider, and fees. We find the same provider offering the same fund oftentimes charges...

If banks reveal their private information it should influence investors' willingness to supply equity capital. We examine this in the setting of IPO markets using a private-information proxy from credit standards. We find that an unfavorable private-information signal results in a decline...

We demonstrate that time stamps reported in I/B/E/S for analysts' recommendations released during trading hours are systematically delayed. Using newswire-reported time stamps, we find 30-minute returns of 1.83% (-2.10%) for upgrades (downgrades), but for this subset of recommendations we find...

We examine how local product market shocks impact individual investors' willingness to own and trade the underlying stock. Using the US airlines industry as our test market, we exploit plausibly exogenous variation generated when airlines supply flights to new markets. We find that active...