An unusually great number of stock exchange transactions on the first trading day following an IPO/SPO

Magomet Yandiev ()
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Magomet Yandiev: Department of Economics, Lomonosov Moscow State University

No 72, Working Papers from Moscow State University, Faculty of Economics

Abstract: This paper analyzes the post-IPO stock underpricing phenomenon using a conceptually new approach – on the basis of data on the number of closed exchange dealings in stocks following a public offering, be it an IPO or an SPO. Two time periods when the phenomenon can be observed are identified. A new cause of the occurrence of the phenomenon in the second of those periods is suggested: the phenomenon occurs due to inflated expectations of speculative investors because of the rise in uncertainty on the stock exchange. A correlation is established between the number of dealings in stocks and the volatility of the stock yield in the first days following the public offering. The research is based on 49 IPO/SPO case studies, most of which were done on the Moscow Exchange.

Keywords: IPO; SPO; number of transactions; stock exchange; underpricing; stock; Moscow Exchange; Russia (search for similar items in EconPapers)
JEL-codes: G11 G12 G23 G32 G41 (search for similar items in EconPapers)
Pages: 21 pages
Date: 2024-08
New Economics Papers: this item is included in nep-cis
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