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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26531
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| Title: | IPO Allocations: Discriminatory or Discretionary? |
| Authors: | Ljungqvist, Alexander P.
Wilhelm, William J. Jr. |
| Keywords: | Initial public offerings
Bookbuilding
Underpricing
Intermediation |
| Issue Date: | 29-Aug-2001 |
| Series/Report no.: | FIN-01-002 |
| Abstract: | We estimate the structural links between IPO allocations, pre-market
information production, and initial underpricing and find that •
allocation policies favor institutional investors, both in the U.S. and
worldwide • increasing institutional allocations results in offer
prices that deviate more from the premarketing price range •
constraints on bankers’ discretion reduce institutional
allocations and result in smaller price revisions, indicating diminished
information production • initial returns are directly related to
information production and inversely related to institutional
allocations Our results indicate that discretionary allocations promote
price discovery in the IPO market and reduce indirect issuance costs for
IPO firms. |
| URI: | http://hdl.handle.net/2451/26531 |
| Appears in Collections: | Finance Working Papers
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