Institutional Allocation in Initial Public Offerings : Empirical Evidence  

Oleh:

Aggarwal, Reena ; Puri, Manju ; Prabhala, Nagpurnanad R.

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Journal of Finance (EBSCO) vol. 57 no. 3 (2002), page 1421-1442.
Topik: asset allocation; studies; initial public offerings; institutional investments; asset allocation; rates of return; stock prices
Fulltext: p 1421.pdf (110.01KB)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ88.6 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

We analyze institutional allocation in initial public offerings (IPOs) using a new data set of U. S. offerings between 1997 and 1998. We document a positive relationship between institutional allocation and day one IPO returns. This is partly explained by the practice of giving institutions more shares in IPOs with stronh premarket demand, consistent with book - buidling theories. However, institutional allocation also contains private information about first - day IPO returns not reflected in premarket demand and other public information. Our evidence supports book - building theories of IPO underpricing, but suggests that institutional allocation in underpriced issues is in excess of that explained by book - building alone.

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