IPO Pricing in “Hot” Market Conditions: Who Leaves Money on the Table?

Two concerns IPO researchers have are the apparent short-run underpricing (the stock trades up in the secondary market) and the longer run underperformance (stock falls during long event window). Previous research has been only partially successful in explaining the continued existence of these two conflicting and seemingly contradictory anomalies. Some of these previous attempts include Chowdry and Nanda 1996 who show that … [ Read more ]