IPO Pricing in the dot-com Bubble

Alexander Ljungqvist (alexander.ljungqvist@hhs.se) and William J Wilhelm

No 3314, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: IPO initial returns reached astronomical levels during 1999-2000. We show that the regime shift in initial returns and other elements of pricing behaviour can be at least partially accounted for by a variety of marked changes in pre-IPO ownership structure and insider selling behaviour over the period which reduced key decision-makers? incentives to control underpricing. After controlling for these changes, there appears to be little special about the 1999-2000 period, aside from the preponderance of Internet and high-tech firms going public. Our results suggest that it was firm characteristics that were unique during the ?dot-com bubble? and that pricing behaviour followed from incentives created by these characteristics.

Keywords: Initial public offerings; Underpricing; Intermediation; Internet; Hot issue markets (search for similar items in EconPapers)
JEL-codes: G24 G32 (search for similar items in EconPapers)
Date: 2002-04
New Economics Papers: this item is included in nep-cfn, nep-ent, nep-fmk and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Related works:
Journal Article: IPO Pricing in the Dot‐com Bubble (2003)
Working Paper: IPO Pricing in the Dot-com Bubble (2002)
Working Paper: IPO Pricing in the Dot-com Bubble (2002)
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