Abstract

http://ssrn.com/abstract=296393
 
 

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A Review of IPO Activity, Pricing and Allocations


Ivo Welch


UCLA; National Bureau of Economic Research (NBER)

Jay R. Ritter


University of Florida - Department of Finance, Insurance and Real Estate

February 2002

Yale ICF Working Paper No. 02-01

Abstract:     
We review the theory and evidence on IPO activity: why firms go public, why they reward first-day investors with considerable underpricing, and how IPOs perform in the long run. Our perspective on the literature is three-fold: First, we believe that many IPO phenomena are not stationary. Second, we believe research into share allocation issues is the most promising area of research in IPOs at the moment. Third, we argue that asymmetric information is not the primary driver of many IPO phenomena. Instead, we believe future progress in the literature will come from non-rational and agency conflict explanations. We describe some promising such alternatives.

Number of Pages in PDF File: 45

Keywords: IPOs

JEL Classification: G24


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Date posted: January 9, 2002  

Suggested Citation

Welch, Ivo and Ritter, Jay R., A Review of IPO Activity, Pricing and Allocations (February 2002). Yale ICF Working Paper No. 02-01. Available at SSRN: http://ssrn.com/abstract=296393 or http://dx.doi.org/10.2139/ssrn.296393

Contact Information

Ivo Welch (Contact Author)
UCLA ( email )
110 westwood plaza
C519
Los Angeles, CA CA 90095-1481
United States
310-825-2508 (Phone)
HOME PAGE: http://www.ivo-welch.info
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Jay R. Ritter
University of Florida - Department of Finance, Insurance and Real Estate ( email )
P.O. Box 117168
Gainesville, FL 32611
United States
(352) 846-2837 (Phone)
(352) 392-0301 (Fax)
HOME PAGE: http://bear.cba.ufl.edu/ritter
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