 Foreign Firms Issuing Equity on US Exchanges: An Empirical Investigation of IPOs and SEOsPadma Kadiyala and Avanidhar Subrahmanyam International Review of Finance, 2002, vol. 3, issue 1, 27-51 Abstract: We analyse a sample of foreign firms issuing equity in the USA to determine the factors that affect IPO and SEO pricing. The average SEO discount, defined as the percentage difference between the price in the local market on the offering date and the SEO offer price, is 2.07%, and is significantly lower for stocks that are ultimately listed on the NYSE/AMEX than for stocks that are listed on the Nasdaq. Foreign equity issues are underpriced; the traditional underpricing discount, which is defined as the percentage difference between the closing price on the first day of trading and the offer price, is 18.75% on average. Equity issuers from industry groups with the largest six–month pre–IPO return in the US market experience a higher level of underpricing. For the subsample of emerging market issues, we document that, in the after–market, the ADR price remains persistently above the dollar denominated price in the domestic market for up to 90 days following the date of the issue. Date: 2002 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:irvfin:v:3:y:2002:i:1:p:27-51 Ordering information: This journal article can be ordered from Access Statistics for this article International Review of Finance is currently edited by Bruce D. Grundy, Naifu Chen, Ming Huang, Takao Kobayashi and Sheridan Titman More articles in International Review of Finance from International Review of Finance Ltd. |
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