The determinants of underpricing for seasoned equity offers

• 成果类型: Article
• 署名作者: Corwin, SA
• 署名单位: University of Notre Dame
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/1540-6261.00604
• 发表日期: 2003
• 页码: 2249-2279
• 关键词: initial public offerings; LARGE-BLOCK TRANSACTIONS; investment banking; adverse selection; demand curves; price; MARKET; STOCK; issues; INFORMATION

摘要

Seasoned offers were underpriced by an average of 2.2 percent during the 1980s and 1990s, with the discount increasing substantially over time. The increase appears to be related to Rule 10b-21 and to economic changes affecting both IPOs and SEOs. Consistent with temporary price pressure, underpricing is positively related to offer size especially for securities with relatively inelastic demand. Underpricing is also positively related to price uncertainty and, after Rule 10b-21, to the magnitude of preoffer returns. Additionally, I find that underpricing is significantly related to underwriter pricing conventions such as price rounding and pricing relative to the bid quote.