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IPO Post-Issue Markets: Questionable Predilections But Diligent Learners?

Bossaerts, Peter and Hillion, Pierre (1997) IPO Post-Issue Markets: Questionable Predilections But Diligent Learners? Social Science Working Paper, 1014. California Institute of Technology , Pasadena, CA. (Unpublished) https://resolver.caltech.edu/CaltechAUTHORS:20170814-141831110

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Abstract

Efficiency in the IPO (Initial Public Offering) aftermarket is tested without imposing any restrictions on the priors about potential default at the issue date. Merging Ritter's extended dataset (which covers the period 1975-84) with the CRSP tapes, IPOs are followed up to ten years after issue. Across all IPOs, or when stratifying IPOs according to issue underpricing, industry affiliation or rank of entry in an industry, little evidence against rational price behavior is found. In contrast, the market clearly over-reacts to information about the eventual fate of low-priced issues. A suggestive relationship between irrational price behavior and subsequent takeover activity is uncovered.


Item Type:Report or Paper (Working Paper)
Related URLs:
URLURL TypeDescription
http://resolver.caltech.edu/CaltechAUTHORS:20170825-064507545Related ItemPublished Version
ORCID:
AuthorORCID
Bossaerts, Peter0000-0003-2308-2603
Additional Information:Many thanks to Jay Ritter for making his dataset available. Published as Bossaerts, P., & Hillion, P. (2001).. The Review of Economics and Statistics, 83(2), 333-347.
Group:Social Science Working Papers
Subject Keywords:Initial Public Offering, Market Effciency, Rational Learning, Default.
Series Name:Social Science Working Paper
Issue or Number:1014
Classification Code:JEL: C22, D84, G14
Record Number:CaltechAUTHORS:20170814-141831110
Persistent URL:https://resolver.caltech.edu/CaltechAUTHORS:20170814-141831110
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:80372
Collection:CaltechAUTHORS
Deposited By: Jacquelyn Bussone
Deposited On:15 Aug 2017 17:02
Last Modified:03 Oct 2019 18:30

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