The Marketing of Initial Public Offerings
64 Pages Posted: 22 Apr 2021
Date Written: April 20, 2021
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: Suggested Citation