The Breadth of IPO Marketing

We measure IPO marketing breadth using the number of prospectuses underwriters distribute during the roadshow. Marketing breadth is strongly related to the underwriter’s network size, but only weakly related to preexisting investor demand for information. Marketing breadth is lower when industry returns and issuer quality are high, suggesting underwriters market more when reputation risk and the marginal value of information are high. After accounting for underwriter networks and preexisting demand, marketing breadth positively predicts pre-IPO price revisions, post-IPO liquidity, and underpricing; just over half of the pricing benefits accrues to underwriters and their clients, and the rest accrues to issuers.

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 (June 24444, 2022). Available at SSRN: https://ssrn.com/abstract=3830911 or http://dx.doi.org/10.2139/ssrn.3830911