Multiple Lead Underwriter IPOs and Firm Visibility
39 Pages Posted: 30 Jan 2013 Last revised: 5 May 2014
Date Written: July 8, 2013
One of the main goals of a firm going public is to create a greater visibility to investors in general. Using a sample of 809 IPOs from 2001-2010, we empirically examine and find that multiple lead underwriters (MLUs) have greater visibility through our five pre- and post-IPO visibility measures. This also holds after accounting for potential endogeneity. In addition, MLU-IPOs do not have more underpricing. Our results suggest that issuers with MLUs can increase firms’ familiarity to the investment community and expand investor base, and this increased firm visibility is not a trade-off for a greater level of underpricing.
Keywords: Multiple lead underwriter, IPO, firm visibility
JEL Classification: G24
Suggested Citation: Suggested Citation