Voluntary Disclosure of Management Earnings Forecasts in Ipos and the Impact on Underpricing and Post - Issue Return Performance

Jog, Vijay M.; McConomy, Bruce J.

doi:10.2139/ssrn.152801

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Voluntary Disclosure of Management Earnings Forecasts in Ipos and the Impact on Underpricing and Post - Issue Return Performance

38 Pages Posted: 13 Mar 1999

See all articles by Vijay M. Jog

Vijay M. Jog

Carleton University - Eric Sprott School of Business

Bruce J. McConomy

Wilfrid Laurier University

Date Written: February 15, 1999

Abstract

Underpricing and post - issue return performance of Initial Public Offerings (IPOs) has long been a subject of extensive research and debate. While a variety of explanations for both have been put forward, asymmetric information between the owner/managers (insiders) and the investing public (outsiders) has factored as one of the main explanations. In this paper, we test for one mechanism designed to alleviate asymmetric information, namely, the voluntary disclosure of management earnings forecasts by issuers of IPOs. Our results indicate that the voluntary disclosure of forecasts has had a significant impact on both underpricing and post - issue return performance.

JEL Classification: G24, G34, G38, M41, M43

Suggested Citation: Suggested Citation

Jog, Vijay M. and McConomy, Bruce J., Voluntary Disclosure of Management Earnings Forecasts in Ipos and the Impact on Underpricing and Post - Issue Return Performance (February 15, 1999). Available at SSRN: https://ssrn.com/abstract=152801 or http://dx.doi.org/10.2139/ssrn.152801