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| Author: | Nimalendran, M. Ritter, J.R. Zhang, D. |
| Title: | Do today's trades affect tomorrow's IPO allocations? |
| Journal: | Journal of Financial Economics
2007 : APR, VOL. 84:1, p. 87-109 |
| Index terms: | finance stock markets initial public offerings trading brokerage commission models |
| Language: | eng |
| Abstract: | Underwriters using bookbuilding can allocate shares of initial public offerings (IPOs) based on, e.g. commissions paid by investors. In testing the hypothesis that investors trade liquid stocks (here as: liq-sts.) to affect their IPO allocations, it is found that money left on the table by IPOs is related to the trading volume of the 50 most liq-sts. near the offer date. For an IPO leaving USD 1 billion on the table, there is abnormal volume from 2.7 to 4.1 percent in the 50 most liq-sts. over the 6 days ending on the day that trading commences in that IPO etc. |
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