Journal article
Divergence of Opinion, Uncertainty, and the Quality of Initial Public Offerings
Financial management, Vol.30(4), pp.5-23
2001
DOI: 10.2307/3666256
Abstract
We explore the relation between investor uncertainty, divergence of opinion, and the performance of initial public offerings (IPOs). We examine three opening-day proxies: the percentage opening spread, time of first trade, and flipping ratio. After controlling for issue quality, we find that all three variables provide significant explanatory power of IPO returns. Specifically, we associate a wide opening spread, late opening trade, and a high flipping ratio with poor long-run returns. The results support Miller (1977), who suggests that greater divergence of opinion or uncertainty about an IPO can generate short-run overvaluation and long-run underperformance.
Details
- Title: Subtitle
- Divergence of Opinion, Uncertainty, and the Quality of Initial Public Offerings
- Creators
- Todd HougeTim LoughranGerry SuchanekXuemin Yan
- Resource Type
- Journal article
- Publication Details
- Financial management, Vol.30(4), pp.5-23
- Publisher
- Financial Management Association
- DOI
- 10.2307/3666256
- ISSN
- 0046-3892
- eISSN
- 1755-053X
- Language
- English
- Date published
- 2001
- Academic Unit
- Finance
- Record Identifier
- 9984380529302771
Metrics
6 Record Views