Offering prospectuses, competitive strategies, and the pricing of initial public offering
School of Economics and Business Administration
Publication / Conference / Sponsorship
The Journal of Private Equity
We explore the relationship between the strategic information in an IPO prospectus and the firm's post-IPO pricing. Based upon a content analysis of 39 business to consumer (B2C) and 25 business to business (B2B) “dot.com” initial public offerings, several conclusions were reached. First, e-commerce firms showed dramatic short‐term underpricing and long-term underperformance. Second, we found strong support that the strategic information contained in the firm's prospectus affects post-IPO pricing, and is incorporated in both the initial day and long-term market-adjusted stock prices. And third, we found that the reputation of the firm's underwriter had little correlation with a firm's post-IPO pricing success.
Merrill, G. B., Galbraith, C.S., De Noble, A., & Stiles, C. (2003). Offering prospectuses, competitive strategies, and the pricing of initial public offering. The Journal of Private Equity, 6 (4), 31-37.
Galbraith, Craig S.; De Noble, Alex F.; Stiles, Curt H.; and Merrill, Gregory B.. Offering prospectuses, competitive strategies, and the pricing of initial public offering (2003). The Journal of Private Equity. 6 (4), 31-37. 10.3905/jpe.2003.320054 [article]. https://digitalcommons.stmarys-ca.edu/school-economics-business-faculty-works/1080