Media Legitimation Effects in the Market for Initial Public Offerings
نویسندگان
چکیده
In this study, we argue that media-provided information affects investors’ impressions of newly public firms. In 225 initial public offerings (IPOs), the volume of mediaprovided information had a negative, diminishing relationship with underpricing and a positive, diminishing relationship with stock turnover on the first day of trading. The relationship between the tenor of media-provided information and underpricing increases at a nonlinear rate, and decreases similarly for turnover. Findings provide important evidence that publicly available information not only reflects IPOs’ legitimacy, but also adds to their legitimacy and influences investor behavior.
منابع مشابه
The Impact of Audit Quality on Earnings Management: An Experimental Study with Evidence from IPO
According to a method of earnings management activities that administrators can manage reported earnings from the definition of real activity. In particular they can be located across time and activities in a way that accounting period to achieve a certain revenue target. Conservative attitudes of auditors in presenting their views about the independence of the auditor can considered as a remar...
متن کاملUnderpricing and Long-Term Performance of Initial Public Offerings at Germany ́s
This is the first large-scale examination of initial public offerings in the German market segment Neuer Markt. As such, it represents a powerful sample to examine the pricing process and long-run performance of the 325 initial public offerings taking place between 1997 and 2001 at the Neuer Markt. The initial returns seem to be higher in the “New Economy”; we find an mean initial return of 49....
متن کاملExplaining Mispricing of Initial Public Offerings
This study examines the relative importance of underpricing as a signal of firm value, underwriter certification, subscription levels of shares on offer, and uncertainty surrounding firm value on mispricing of initial public offerings. A sample of 100 Singaporean initial public offerings (IPOs) during the period 1998-2000 indicates that subscription levels of shares on offer have the most signi...
متن کاملMarket Watch: Information and Availability Cascades among the Media and Investors in the U.s. Ipo Market
In this study we advance current research on social influence in markets by examining how the recency and availability of information about others’ actions within and between different communities influence their allocation of attention and their evaluations. Specifically, we examine how the media and investors allocate attention to and evaluate newly public firms in the days following their in...
متن کاملUnderpricing of Initial Public Offerings in Almost Perfect Capital Markets: Experimental Evidence
The underpricing of initial public offerings is a well-documented fact of empirical equity market research. Theories explain this underpricing with market imperfections. We study three empirically relevant IPO mechanisms under almost perfect market conditions in the laboratory: a stylized book building approach, a closed book auction, and an open book auction. We report underpricing in each of ...
متن کامل