Reforming the Bookbuilding Process for Ipos

17 Pages Posted: 14 Jan 2005

See all articles by Ann E. Sherman

Ann E. Sherman

DePaul University

Ravi Jagannathan

Northwestern University - Kellogg School of Management; National Bureau of Economic Research (NBER); Shanghai Jiao Tong University (SJTU) - Shanghai Advanced Institute of Finance (SAIF); Indian School of Business (ISB), Hyderabad

Date Written: January 12, 2005

Abstract

The debate over the reform of the IPO process has focused mainly on replacing the currently used bookbuilding method with standard auctions. We point out that while standard auctions have the advantage that they are transparent, they may not be as good as bookbuilding in successfully bringing new equity issues to the market. We therefore suggest modifying the bookbuilding method in order to retain its advantages while at the same time making it transparent and encouraging retail participation.

Keywords: IPO, Bookbuilding, Auctions, Method, Reform

JEL Classification: G24, G28, G32

Suggested Citation

Sherman, Ann E. and Jagannathan, Ravi, Reforming the Bookbuilding Process for Ipos (January 12, 2005). Available at SSRN: https://ssrn.com/abstract=648322 or http://dx.doi.org/10.2139/ssrn.648322

Ann E. Sherman (Contact Author)

DePaul University ( email )

1 East Jackson Blvd.
Chicago, IL 60604-2287
United States
312-362-5499 (Phone)

Ravi Jagannathan

Northwestern University - Kellogg School of Management ( email )

2001 Sheridan Road
429 Andersen Hall
Evanston, IL 60208
United States
847-491-8338 (Phone)
847-491-5719 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Shanghai Jiao Tong University (SJTU) - Shanghai Advanced Institute of Finance (SAIF) ( email )

Shanghai Jiao Tong University
211 West Huaihai Road
Shanghai, 200030
China

Indian School of Business (ISB), Hyderabad ( email )

Hyderabad, Gachibowli 500 019
India

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