Does an initial public offering (IPO) issuer's Securities and Exchange Commission registration fee calculation method predict pricing revisions and IPO underpricing?

Patrick M. Corrigan

Journal of Empirical Legal Studies, 2022, vol. 19, issue 4, 1114-1147

Abstract: This paper proposes a new proxy for the ex ante expectations of issuers and their underwriters about the direction of pricing revisions during the roadshows of an initial public offering (IPO): the way issuers elect to calculate the registration fees owed to the Securities and Exchange Commission. Consistent with fee‐minimizing decision‐making, I find that the choice of fee calculation method is associated with pricing revisions and IPO underpricing. This relationship suggests that issuers or their advisors may not incorporate economically significant private valuation information into the initial pricing range estimate and initial public offering price. The results provide empirical support for theoretical models of partial adjustment and IPO underpricing driven by the preferences of underwriters or managers of issuers for underpriced IPOs.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/jels.12332

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:empleg:v:19:y:2022:i:4:p:1114-1147

Access Statistics for this article

More articles in Journal of Empirical Legal Studies from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().