Officer, Micah S.
[Verfasser:in]
;
Lowry, Michelle
[Sonstige Person, Familie und Körperschaft];
Schwert, G. William
[Sonstige Person, Familie und Körperschaft]
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 2006 erstellt
Beschreibung:
The monthly volatility of IPO initial returns is substantial, fluctuates dramatically over time, and is considerably larger during quot;hotquot; IPO markets. Consistent with IPO theory, the volatility of initial returns is higher among firms whose value is more difficult to estimate, i.e., among firms with higher information asymmetry. Our findings highlight underwriters' difficulty in valuing companies characterized by high uncertainty, and, as a result, raise serious questions about the efficacy of the traditional firm commitment underwritten IPO process. One implication of our results is that alternate mechanisms, such as auctions, may be beneficial, particularly for firms that value price discovery over the auxiliary services provided by underwriters