The Breadth of IPO Marketing

57 Pages Posted: 22 Apr 2021 Last revised: 1 Jan 2022

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: December 15, 2021

Abstract

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

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

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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