Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/76915
Authors: 
Löffler, Gunter
Panther, Patrick F.
Theissen, Erik
Year of Publication: 
2002
Series/Report no.: 
Working Paper Series: Finance & Accounting, Johann Wolfgang Goethe-Universität Frankfurt a. M. 91
Abstract: 
To resolve the IPO underpricing puzzle it is essential to analyze who knows what when during the issuing process. In Germany, broker-dealers make a market in IPOs during the subscription period. We examine these pre-issue prices and find that they are highly informative. They are closer to the first price subsequently established on the exchange than both the midpoint of the bookbuilding range and the offer price. The pre-issue prices explain a large part of the underpricing left unexplained by other variables. The results imply that information asymmetries are much lower than the observed variance of underpricing suggests.
Subjects: 
Initial public offerings
asymmetric information
information production
underpricing
when-issued trading
winner's curse
JEL: 
G10
G14
G24
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

Files in This Item:
File
Size
243.97 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.