Price Discovery in Initial Public Offerings And The Role of The Lead Underwriter  

Oleh:

Aggarwal, Reena ; Conroy, Pat

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 55 no. 6 (2000), page 2903-2922.
Topik: discovery; initial public offerings; studies; stock prices; investment bankers; time
Fulltext: p 2903.pdf (295.48KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88.3 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

We examine the price discovery process of initial public offerings (IPOs) using a unique dataset. The first quote entered by the lead underwriter in the five - minute preopenig window explains a large propotion of initial returns even for hot IPOs. Significant learning and price discovery continues to take place during these fie minutes with hundreds of quotes being entered. The lead underwriter observes the quoting behaviour of other market makers, particularly the wholesalers, and accordingly revises his own quotes. There is a strong positive relationship between intial returns and the time of day when trading starts in an IPO.

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