Why are IPOs underpriced? Evidence from Japan's hybrid auction-method offerings

• 成果类型: Article
• 署名作者: Kerins, Frank; Kutsuna, Kenji; Smith, Richard
• 署名单位: Montana State University System; Montana State University Bozeman; Kobe University; Claremont Colleges; Claremont Graduate University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2006.06.006
• 发表日期: 2007
• 页码: 637-666
• 关键词: IPO; public offering; book building; Underpricing; PARTIAL ADJUSTMENT

摘要

We document discretionary underpricing and partial adjustment of IPO prices in the public offer tranche of Japan's hybrid auction regime, in which investor information differences are not important, there are no roadshows, preferential allocations are negligible, institutional investing is low, and the public offer tranche cannot fail. The magnitude and variation of underpricing in our sample, which spans relatively hot and cold markets, are similar to those reported for US IPOs. The evidence is most consistent with underpricing arising from an implicit contract to allocate risk related to initial mispricing where, in exchange for guaranteeing a minimum price, the underwriter participates indirectly in upside performance. The results raise important questions about interpretations of IPO underpricing in the US. (c) 2007 Elsevier B.V. All rights reserved.