The JOBS Act and IPO underpricing

Yuxiang Bian, Tiantian Hu, Haoran Liu, Wentao Su and Ren Wang

The North American Journal of Economics and Finance, 2024, vol. 70, issue C

Abstract: In the realm of Initial Public Offerings (IPOs), the initial day stock price return, known as underpricing, poses a considerable financial burden on capital issuers. This study scrutinizes two hypotheses regarding IPO underpricing: the general information asymmetry theory, positing that ‘underpricing’ compensates for investor uncertainty about firm quality, and the practical underwriter-institutional investor collusion, potentially explaining the recent upswing in underpricing.

Keywords: IPO underpricing; JOBS Act; Collusion hypothesis (search for similar items in EconPapers)
JEL-codes: G0 G12 G14 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:70:y:2024:i:c:s1062940824000044

DOI: 10.1016/j.najef.2024.102080

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