Abstract

http://ssrn.com/abstract=295662
 
 

References (25)



 
 

Citations (75)



 


 



IPO Pricing in the Dot-Com Bubble: Complacency or Incentives?


Alexander Ljungqvist


New York University (NYU) - Department of Finance; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI); Research Institute of Industrial Economics (IFN)

William J. Wilhelm


University of Virginia - McIntire School of Commerce

December 11, 2001

NYU Stern School of Business Finance Dept. FIN-01-061

Abstract:     
IPO initial returns reached astronomical levels during 1999-2000. We show that the regime shift in initial returns and other elements of pricing behavior can be at least partially accounted for by a variety of marked changes in pre-IPO ownership structure and insider selling behavior over the period which reduced key decision-makers' incentives to control underpricing. After controlling for these changes, there appears to be little special about the 1999-2000 period, aside from the preponderance of internet and high-tech firms going public. Our results suggest that it was firm characteristics that were unique during the "dot-com bubble" and that pricing behavior followed from incentives created by these characteristics.

Number of Pages in PDF File: 40

Keywords: Initial public offerings, Underpricing, Intermediation, Internet, Hot issue markets

JEL Classification: G32, G24

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Date posted: January 9, 2002  

Suggested Citation

Ljungqvist, Alexander and Wilhelm, William J., IPO Pricing in the Dot-Com Bubble: Complacency or Incentives? (December 11, 2001). NYU Stern School of Business Finance Dept. FIN-01-061. Available at SSRN: http://ssrn.com/abstract=295662 or http://dx.doi.org/10.2139/ssrn.295662

Contact Information

Alexander Ljungqvist (Contact Author)
New York University (NYU) - Department of Finance ( email )
Stern School of Business
44 West 4th Street, Suite 9-160
New York, NY 10012-1126
United States
212-998-0304 (Phone)
212-995-4220 (Fax)
HOME PAGE: http://pages.stern.nyu.edu/~aljungqv
National Bureau of Economic Research (NBER) ( email )
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
European Corporate Governance Institute (ECGI)
c/o ECARES ULB CP 114
B-1050 Brussels
Belgium
Research Institute of Industrial Economics (IFN) ( email )
Box 55665
Grevgatan 34, 2nd floor
Stockholm, SE-102 15
Sweden
William J. Wilhelm
University of Virginia (UVA) - McIntire School of Commerce ( email )
Rouss & Robertson Halls, East Lawn
P.O. Box 400173
Charlottesville, VA 22904-4173
United States
434-924-7666 (Phone)
434-924-7074 (Fax)
HOME PAGE: http://gates.comm.virginia.edu/wjw9a/
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