Short Selling in Initial Public Offerings

  title={Short Selling in Initial Public Offerings},
  author={A. K. Edwards and Kathleen Weiss Hanley},
A number of academic papers have used short sale constraints in the immediate aftermarket of IPOs to explain short-term pricing anomalies that are subsequently reversed in the long-term. Using newly available data, this paper documents that short selling is prevalent early in the aftermarket trading of IPOs. Greater short selling is observed in IPOs with positive changes in offer price, high initial returns and large trading volume. Although large levels of underpricing may be indicative of… CONTINUE READING


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