When firms go public in an IPO, they must choose a number of shares to offer and a price level for those shares. Given an estimated total value, this division would seem to have little economic significance. Casual empiricism and the evidence from stock splits, however, suggest that firms do not choose their IPO share price level arbitrarily. We ask whether IPO prices are informative, in the se...

IPO initial returns reached astronomical levels during 1999-2000. We show that the regime shift in initial returns and other elements of pricing behavior can be at least partially accounted for by a variety of marked changes in pre-IPO ownership structure and insider selling behavior over the period, which reduced key decision-makers’ incentives to control underpricing. After controlling for th...

In recent years, the initial public offerings of technology companies on Indonesia Stock Exchange have drawn great interest investors. However, difficulties arise in assessing valuation a relatively new company, hence retail investors may turn to other fundamental factors such as sales growth and issuing size with online media become source information forum for discussions. These activities ar...

Using Japanese firms that went public during the period 1998-2006, we find that independent venture capitalist-backed IPO firms are significantly younger and smaller than IPO companies backed by venture capital firms that are subsidiaries of financial institutions. Independent venture capitalists tend to make firms go public on stock exchanges with less strict listing requirements. Importantly,...

W conducted prediction markets designed to forecast post-initial public offering (IPO) valuations before a particularly unique IPO: Google. The prediction markets forecast Google’s post-IPO market capitalization relatively accurately. While Google’s auction-based IPO price was 15.3% below the first-day closing market capitalization, the final prediction market forecast was only 4.0% above it. T...

Greater partisan alignment among lawmakers enhances their ability to respond rapidly adverse shocks, but it also undermines the quality of checks and balances encourages excessive governmental intervention in local areas aligned with ruling party. We investigate how this form policy risk affects IPO underpricing. One standard-deviation increase political between politicians federal government t...