Ljungqvist and Wilhelm (2003) investigate the pricing of both US and international
IPOs. In line with other studies, they reported that price revisions explain underpric-
ing. However, in contrast to Lowry and Schwert (2004), they do not find that under-
writers are including negative information more fully than positive information.
Another finding is that IPO deal flow has a negative effect on underpricing. A higher
(expected) deal flow affords underwriters the opportunity to exclude investors from
other, profitable deals as retaliation for distorting their private information. This
increases the market power of underwriters and reduces the need ...
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