Institutional allocation in initial public offerings: Empirical evidence

• 成果类型: Article
• 署名作者: Aggarwal, R; Prabhala, NR; Puri, M
• 署名单位: Georgetown University; University System of Maryland; University of Maryland College Park; Stanford University; National Bureau of Economic Research
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/1540-6261.00465
• 发表日期: 2002
• 页码: 1421-1442
• 关键词: STRATEGIC ALLOCATION; underwriter; reputation; issues; models; tests; ipos

摘要

We analyze institutional allocation in initial public offerings (IPOs) using a new data set of U.S. offerings between 1997 and 1998. We document a positive relationship between institutional allocation and day one IPO returns. This is partly explained by the practice of giving institutions more shares in IPOs with strong premarket demand, consistent with book-building theories. However, institutional allocation also contains private information about first-day IPO returns not reflected in premarket demand and other public information. Our evidence supports book-building theories of IPO underpricing, but suggests that institutional allocation in underpriced issues is in excess of that explained by book-building alone.