 Partial adjustment of hybrid book-building IPOs with a pre-IPO marketLanfeng Kao and Anlin Chen The Quarterly Review of Economics and Finance, 2019, vol. 74, issue C, 292-300 Abstract: Partial adjustment of book-building IPOs is to compensate bidders for their revealing positive information and is well documented in the U.S. pure book-building IPOs. We find that partial adjustment does not exist in Taiwanese hybrid dual-tranche book-building with a clawback provision and a pre-IPO market. In Taiwanese book-building, underwriters collect demand information during the pre-marketing period to set a price range and collect retail subscribers’ interests during the pre-selling period and trading information in the pre-IPO market to set a final offer price. The dual-tranche with a clawback provision hinders bidders from divulging positive information during the pre-selling period. Attracting retail subscription in the dual-tranche hybrid book-building process hurts underwriters’ information acquisition from the bidders. Underwriters set the final offer price based on the free information of retail subscription and the trading information in the pre-IPO market rather than bidders’ private information. Keywords: Hybrid book-building; Initial public offerings; Partial adjustment; Pre-IPO market (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:quaeco:v:74:y:2019:i:c:p:292-300 DOI: 10.1016/j.qref.2019.01.005 Access Statistics for this article The Quarterly Review of Economics and Finance is currently edited by R. J. Arnould and J. E. Finnerty More articles in The Quarterly Review of Economics and Finance from Elsevier |
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