Marketing Closed-End Fund Ipos: An Analysis of the International Stock Funds

Posted: 15 Aug 2005

See all articles by Terry Nixon

Terry Nixon

Miami University of Ohio

David C. Leonard

David M. Shull

Miami University of Ohio - Department of Finance

Abstract

Various studies argue that underwriting fees are excessive and investment bankers prolong the price stabilization period in aftermarket trading of closed-end fund (CEF) shares. The poor performance of these funds also raises questions about the financial sophistication of IPO buyers.

In this study, we examine these issues for a sample of international stock CEFs. Our findings indicate that underwriting fees are not excessive relative to industrial issues, and we do not find that investment bankers prolong the stabilization period to camouflage the underwriting cost. Our findings are consistent with earlier studies that discounts contribute significantly to the poor performance during the first six months of aftermarket trading.

Keywords: IPO, Closed-end funds, discounts, investment bankers, stabilization

JEL Classification: G12, G14, G29

Suggested Citation

Nixon, Terry David and Leonard, David C. and Shull, David Myron, Marketing Closed-End Fund Ipos: An Analysis of the International Stock Funds. Financial Review, Vol. 40, No. 4, November 2005, Available at SSRN: https://ssrn.com/abstract=774584

Terry David Nixon (Contact Author)

Miami University of Ohio ( email )

Oxford, OH 45056
United States

David Myron Shull

Miami University of Ohio - Department of Finance ( email )

Oxford, OH 45056
United States

No contact information is available for David C. Leonard

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