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Are Mondays different? Evidence from initial public offerings

Author

Listed:
  • Chowdhury, Abu
  • Vaihekoski, Mika
  • Zaman, Mir

Abstract

This paper investigates how and why initial public offerings (IPOs) issued on Mondays differ from those on other days. We provide evidence that Monday IPOs make a significantly larger number of filing price amendments during the road show and set offer prices that exceed the filing price range, resulting in higher positive offer price revisions. We also find that Monday IPOs receive less analyst coverage than other-day IPOs, despite their underwriting fees being the same and their total underwriter compensation being higher. Therefore, Monday IPOs are more likely to change lead underwriters in subsequent equity offerings and have a higher risk of delisting as aftermarket support and maintaining good relations with investment banks are critical for their long run survival. We also investigate why underwriters issue IPOs on Mondays. We suggest four possible explanations for Monday IPOs and find indirect evidence that supports the deliberate road show extension explanation.

Suggested Citation

  • Chowdhury, Abu & Vaihekoski, Mika & Zaman, Mir, 2024. "Are Mondays different? Evidence from initial public offerings," Global Finance Journal, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:glofin:v:63:y:2024:i:c:s1044028324001157
    DOI: 10.1016/j.gfj.2024.101043
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    More about this item

    Keywords

    Monday IPOs; Offer price revisions; Underwriting syndicate; Compensation; Aftermarket support; Analyst coverage; Delisting;
    All these keywords.

    JEL classification:

    • 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
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage

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