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The JOBS Act and IPO underpricing

Author

Listed:
  • Bian, Yuxiang
  • Hu, Tiantian
  • Liu, Haoran
  • Su, Wentao
  • Wang, Ren

Abstract

In the realm of Initial Public Offerings (IPOs), the initial day stock price return, known as underpricing, poses a considerable financial burden on capital issuers. This study scrutinizes two hypotheses regarding IPO underpricing: the general information asymmetry theory, positing that ‘underpricing’ compensates for investor uncertainty about firm quality, and the practical underwriter-institutional investor collusion, potentially explaining the recent upswing in underpricing.

Suggested Citation

  • Bian, Yuxiang & Hu, Tiantian & Liu, Haoran & Su, Wentao & Wang, Ren, 2024. "The JOBS Act and IPO underpricing," The North American Journal of Economics and Finance, Elsevier, vol. 70(C).
    • Handle: RePEc:eee:ecofin:v:70:y:2024:i:c:s1062940824000044
    DOI: 10.1016/j.najef.2024.102080
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    IPO underpricing; JOBS Act; Collusion hypothesis;
    All these keywords.

    JEL classification:

    • G0 - Financial Economics - - General
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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