Division of the Humanities and Social Sciences California Institute of Technology Pasadena, California 91125 Ipo Post-issue Markets: Questionable Predilections but Diligent Learners?

نویسندگان

  • Peter Bossaerts
  • Pierre Hillion
چکیده

E ciency in the IPO (Initial Public O ering) aftermarket is tested without imposing any restrictions on the priors about potential default at the issue date. Merging Ritter's extended dataset (which covers the period 1975-84) with the CRSP tapes, IPOs are followed up to ten years after issue. Across all IPOs, or when stratifying IPOs according to issue underpricing, industry a liation or rank of entry in an industry, little evidence against rational price behavior is found. In contrast, the market clearly over-reacts to information about the eventual fate of low-priced issues. A suggestive relationship between irrational price behavior and subsequent takeover activity is uncovered.

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تاریخ انتشار 1997