IPO Underpricing, Trading Volume, and Investor Interest

41 Pages Posted: 31 Aug 1998

Date Written: August 10, 1998


The level of "investor interest" in an IPO prior to its issue influences its offer price, its initial return and its initial trading volume. After issue, this interest level impacts the stock's long-term trading volume, leading to a positive relationship between an IPO's initial return and its trading volume for more than three years after issuance. Using newspaper references as a proxy for the level of interest in a firm, I find that investor interest is positively related to initial return, initial trading volume and long-term trading volume.

JEL Classification: G10, G14

Suggested Citation

Reese, William, IPO Underpricing, Trading Volume, and Investor Interest (August 10, 1998). Available at SSRN: https://ssrn.com/abstract=115348 or http://dx.doi.org/10.2139/ssrn.115348

William Reese (Contact Author)

Tulane University ( email )

6823 St Charles Ave
New Orleans, LA 70118
United States

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