search query: @indexterm Initial Public Offerings / total: 176
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| Author: | Cook, D.O. Kieschnick, R. Ness, R.A. Van |
| Title: | On the marketing of IPOs |
| Journal: | Journal of Financial Economics
2006 : OCT, VOL. 82:1, p. 35-61 |
| Index terms: | initial public offerings investment banks marketing pricing |
| Language: | eng |
| Abstract: | Derrien (2005) and Ljungqvist et al. (2006) build upon the work of Miller (1977) and claim that issuers and the regular customers of investment bankers benefit from the presence of sentiment investors (noise traders) in the market for an initial public offering (IPO). Thus, it is argued that investment bankers have an incentive to promote an IPO to induce sentiment investors into the market for it. Consistent with this motivation and these models, it is expected that the promotional efforts of investment bankers should influence the compensation of investment bankers, the valuation of an IPO, its initial returns and trading, the wealth gains of insider shareholders, and the likelihood that an issuer switches investment bankers for a subsequent seasoned equity offering. |
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