Reforming the Bookbuilding Process for Ipos
17 Pages Posted: 14 Jan 2005
Date Written: January 12, 2005
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: Suggested Citation