IPO Pricing with Bookbuilding and a When-Issued Market

Alex Stomper, Wolfgang Aussenegg and Pegaret Pichler
Additional contact information
Wolfgang Aussenegg: Department of Finance, Vienna University of Technology
Pegaret Pichler: Department of Finance and Economics, Sloan School of Management Massachusetts Institute of Technology

No 2004.8, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This paper examines the German IPO pricing process which combines bookbuilding with a liquid pre-IPO when-issued market. We find no partial adjustment phenomenon, as has been documented for U.S. IPOs. We thus find no evidence that bookbuilding provides information for IPO pricing, beyond the information that is required to set preliminary price ranges. Once price ranges are set, when-issued trading commences and indicates how IPOs should be priced in the primary market. However, the evidence suggests that such trading does not fully supplant information gathering through bookbuilding.

Keywords: Initial public offerings; Bookbuilding; When-issued trading (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Date: 2004-01
New Economics Papers: this item is included in nep-cfn and nep-fmk
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Related works:
Journal Article: IPO Pricing with Bookbuilding and a When-Issued Market (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2004.8

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