Monitoring as a Motivation for IPO Underpricing

@inproceedings{ARUGASLAN2003MonitoringAA,
  title={Monitoring as a Motivation for IPO Underpricing},
  author={ONUR ARUGASLAN and D. Cook and ROBERT KIESCHNICK},
  year={2003}
}
  • ONUR ARUGASLAN, D. Cook, ROBERT KIESCHNICK
  • Published 2003
Brennan and Franks (1997) and Stoughton and Zechner (1998) provide contrasting arguments for why monitoring considerations create incentives for managers to underprice their firms’ IPOs. Like Smart and Zutter (2003), we examine these arguments using a sample of U.S. IPOs. However, we find evidence that the determinants of initial returns, institutional shareholdings, and post-IPO likelihood of acquisition are not consistent with these arguments. Thus, we conclude that monitoring considerations… CONTINUE READING

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