The Marketing of Initial Public Offerings

64 Pages Posted: 22 Apr 2021

See all articles by Matthew Gustafson

Matthew Gustafson

Pennsylvania State University - Smeal College of Business

Joseph J. Henry

Rowan University - Accounting & Finance

Emily Kim

University of Kansas - School of Business

Kevin Pisciotta

University of Kansas - School of Business

Date Written: April 20, 2021

Abstract

Using a novel measure of marketing during initial public offering (IPO) roadshows, we find that marketing positively predicts underpricing, price revisions, and post-IPO liquidity, but has little effect on fees. We further show that IPO roadshow duration and marketing intensity have decreased dramatically over the last fifteen years, leading up to and continuing through the COVID-19 period. Additional tests suggest these trends are related to technological development and the rise in passive ownership. Our findings are relevant to issuers’ choice between traditional bookbuilt IPOs and other capital raising alternatives (e.g., reverse mergers with special purpose acquisition companies (SPACs)).

Keywords: Bookbuilding, IPO Marketing, Initial Public Offerings, Fintech, COVID-19

JEL Classification: G20, G24, G30

Suggested Citation

Gustafson, Matthew and Henry, Joseph J. and Kim, Emily and Pisciotta, Kevin, The Marketing of Initial Public Offerings (April 20, 2021). Available at SSRN: https://ssrn.com/abstract=3830911 or http://dx.doi.org/10.2139/ssrn.3830911

Matthew Gustafson

Pennsylvania State University - Smeal College of Business ( email )

East Park Avenue
University Park, PA 16802
United States

Joseph J. Henry (Contact Author)

Rowan University - Accounting & Finance ( email )

Glassboro, NJ 08028
United States

Emily Kim

University of Kansas - School of Business ( email )

Capitol Federal Hall
1654 Naismith Dr.
Lawrence, KS 66045
United States

Kevin Pisciotta

University of Kansas - School of Business ( email )

Capital Federal Hall
1654 Naismith Dr
Lawrence, KS 66045
United States

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