Journal article
Does Sentiment Drive the Retail Demand for IPOs?
Journal of financial and quantitative analysis, v 44(1), pp 85-108
Feb 2009
Abstract
Individual and institutional investors can trade German initial public equity offerings on an as-if/when-issued basis before the start of secondary trading. Using actual when-issued trades made by a sample of clients at a large German retail broker during 1999 and 2000, the paper documents that retail buyers consistently overpay for initial public offerings (IPOs) in the when-issued market relative to the immediate aftermarket. The observed willingness to overpay points to sentiment as a driver of retail trading decisions. Consistent with this interpretation and with sentiment affecting prices, IPOs that are aggressively bought by individuals in the when-issued market exhibit high first-day returns as well as poor aftermarket returns relative to benchmarks of similar stocks.
Metrics
Details
- Title
- Does Sentiment Drive the Retail Demand for IPOs?
- Creators
- Daniel Dorn - Drexel University
- Publication Details
- Journal of financial and quantitative analysis, v 44(1), pp 85-108
- Publisher
- Cambridge University Press
- Number of pages
- 24
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Finance
- Web of Science ID
- WOS:000265620200004
- Scopus ID
- 2-s2.0-67649647650
- Other Identifier
- 991019168508104721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Web of Science research areas
- Business, Finance
- Economics