The Informational Content of Initial Public Offerings

Ian Gale and Joseph Stiglitz

No 3259, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The ability of capital markets to distinguish firms of different value by the size of their initial equity offerings is attenuated when insiders can sell equity more than once. A model is developed in which there is price risk from holding equity between periods. When the uncertainty is small. there must be pooling in the first period. When uncertainty is large. the pooling equilibria dominate the separating equilibrium.

Date: 1990-02
Note: ME
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published as "The Information Content of Initial Public Offerings", JF, Vol. 44, no. 2 (1989): 469-478.
Published as Gale, Ian L & Stiglitz, Joseph E, 1989. " The Informational Content of Initial Public Offerings," Journal of Finance, American Finance Association, vol. 44(2), pages 469-77, June.

Downloads: (external link)
http://www.nber.org/papers/w3259.pdf (application/pdf)

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:nbr:nberwo:3259

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w3259

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().