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IPO Market Cycles: Bubbles or Sequential Learning?
Journal article   Open access   Peer reviewed

IPO Market Cycles: Bubbles or Sequential Learning?

Michelle Lowry and G. William Schwert
The Journal of finance (New York), v 57(3), pp 1171-1200
Jun 2002
DOI: https://doi.org/10.1111/1540-6261.00458
url
http://papers.nber.org/papers/w7935.pdfView
SubmittedOpen Access (License Unspecified),  Open
url
https://doi.org/10.1111/1540-6261.00458View
Published, Version of Record (VoR) Open

Abstract

Autocorrelation Business structures Economic bubbles Initial public offerings Investors Market prices P values Public companies Secondary markets Sequential learning
Both IPO volume and average initial returns are highly autocorrelated. Further, more companies tend to go public following periods of high initial returns. However, we find that the level of average initial returns at the time of filing contains no information about that company's eventual underpricing. Both the cycles in initial returns and the lead-lag relation between initial returns and IPO volume are predominantly driven by information learned during the registration period. More positive information results in higher initial returns and more companies filing IPOs soon thereafter.

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290 citations in Web of Science
355 citations in Scopus

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Collaboration types
Domestic collaboration
Web of Science research areas
Business, Finance
Economics
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