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Handbook of Empirical Corporate Finance SET
book

Handbook of Empirical Corporate Finance SET

by Bjørn Espen Eckbo
December 2008
Intermediate to advanced content levelIntermediate to advanced
520 pages
43h 42m
English
North Holland
Content preview from Handbook of Empirical Corporate Finance SET
Chapter 7

IPO Underpricing*

Alexander Ljungqvist1aljungqv@stern.nyu.edu    Leonard N. Stern School of Business, New York University, 44 West 4th Street, Suite 9-160, New York, NY 10012, USA1 Address for correspondence: Stern School of Business, New York University, Suite 9-160, 44 West Fourth Street, New York, NY 10012-1126. Phone 212-998-0304. Fax 212-995-4220.

Abstract

When companies go public, the equity they sell in an initial public offering tends to be underpriced, resulting in a substantial price jump on the first day of trading. The underpricing discount in the United States averaged more than 20% during the 1990s, implying that firms left considerable amounts of money on the table. What explains this phenomenon?

This chapter reviews the principal ...

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Publisher Resources

ISBN: 9780444532657