The Breadth of IPO Marketing

We introduce a novel measure of the breadth of underwriter marketing during initial public offering (IPO) roadshows that captures the number of preliminary prospectuses that underwriters submit to investors, as reported in disclosures to the SEC. The measure is strongly related to the preexisting size of underwriters’ networks and is complementary to preexisting investor demand. After accounting for underwriter networks and preexisting demand, we find that underwriter marketing breadth increases pre-IPO price revisions and post-IPO liquidity, and increases underwriter profits through dollar fees and underpricing.

Keywords: Bookbuilding; IPO Marketing; Initial Public Offerings; Information Dissemination

JEL Classification: G20, G24, G30

Suggested Citation: Suggested Citation

Gustafson, Matthew and Henry, Joseph J. and Kim, Emily and Pisciotta, Kevin, The Breadth of IPO Marketing (December 15, 2021). Available at SSRN: https://ssrn.com/abstract=3830911 or http://dx.doi.org/10.2139/ssrn.3830911