Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

Sunday, May 3, 2009

Spindler on IPO Underpricing

IPO Underpricing and Disclosure, by James C. Spindler, University of Southern California Law School, was recently posted on SSRN.  Here is the abstract:

Using a unique data set, I find that U.S. IPO prospectus disclosure dramatically affects the degree of first day underpricing of the new issue, consistent with theories of underpricing as caused by informational asymmetry. In particular, a 1 standard deviation increase in positive prospectus disclosure is associated with almost a third reduction in first day underpricing. Further, this may derive from disclosure-related litigation risk: an increase in negative prospectus disclosure is associated with an increase in subsequent IPO-related lawsuits, which suggests that less positive (or more negative) disclosure is a reaction to litigation risk.

Law Review Articles | Permalink

TrackBack URL for this entry:

Listed below are links to weblogs that reference Spindler on IPO Underpricing:


Post a comment