search query: @author Hao, Q.G. / total: 1
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| Author: | Hao, Q.G. |
| Title: | Laddering in initial public offerings |
| Journal: | Journal of Financial Economics
2007 : JUL, VOL. 85:1, p. 102-122 |
| Index terms: | initial public offerings models |
| Freeterms: | underpricing |
| Language: | eng |
| Abstract: | This paper identifies factors creating incentives to engage a type of manipulation and models the effect of laddering (hereafter as: lng.) on initial public offering (IPO) pricing. Lng. is shown to have a bigger effect on the market price of IPOs with greater expected underpricing (here as: u-png.) and greater expected momentum in the aftermarket. Lng. increases the IPO offer price, the aftermarket price, and the money left on the table but does not necessarily increase the percentage u-png. Lng. contributes to long-run underperformance, creating a negative correlation btw. short-run and long-run returns, and profit-sharing increases the extent of lng. and the percentage u-png. |
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