IPO Pricing with Bookbuilding and a When-Issued Market

Wolfgang Aussenegg, Pegaret Pichler and Alex Stomper

Journal of Financial and Quantitative Analysis, 2006, vol. 41, issue 4, 829-862

Abstract: We study IPO pricing in Germany to determine whether when-issued trading provides information that is useful for setting IPO offer prices, and whether such trading supplants bookbuilding as a source of information. We find that when-issued trading reveals relevant information for pricing IPOs, and that, once when-issued trading has begun, bookbuilding is not a source of costly information for pricing. But bookbuilding does not appear to be fully supplanted as a source of pricing information. We find evidence consistent with bookbuilding being used to gather information prior to the onset of when-issued trading.

Date: 2006
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Working Paper: IPO Pricing with Bookbuilding and a When-Issued Market (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jfinqa:v:41:y:2006:i:04:p:829-862_00

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