Information Disclosure and IPO Valuation: What Kinds of Information Matter and is More Information Always Better?

Nam, Daeil; Arthurs, Jonathan D.; Nielsen, Marsha L.; Mousa, Fariss; Liu, Kun

doi:10.2139/ssrn.1348222

Cited by 1 publication

(1 citation statement)

References 70 publications

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“…Park and Patel (2015) argue that IPO underpricing is low when the prospectus contains more information. Their view is supported by Nam, Arthurs, Nielsen, Mousa, and Liu (2009) where they have identified a negative relationship between information disclosure and IPO underpricing. Leone, Rock, and Willenborg (2007) suggest that when IPO issuers provide extensive disclosures on their intended use of proceeds, they will lower IPO underpricing because that will reduce the uncertainty of the IPO investors.…”

Section: Ipo Underpricingmentioning

confidence: 99%

IPO Underpricing and Prospectus Readability: A Machine Learning Approach

2021

JABE

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IPO prospectus is the crucial document available to investors, allowing investors to understand the company and the IPO. IPO underpricing occurs when the closing price of the initial public offer (IPO) is higher than the offering price on its first trading day. If investors know whether the IPO is likely to be underpriced, they can earn a significant return by subscribing to those underpriced IPOs and selling the shares on the first trading day. In this study, the relationships between the readability of the IPO prospectus and IPO underpricing of firms listed in the Hong Kong Stock Exchange are analyzed using the gradient boost decision tree approach. This study shows that the readability scores of the chapters in the IPO prospectus are relevant to identify underpriced IPOs. Additionally, several indicators are more crucial to identify underpriced IPOs.

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Section: Ipo Underpricingmentioning

confidence: 99%

IPO Underpricing and Prospectus Readability: A Machine Learning Approach

2021

JABE

View full text Add to dashboard Cite

show abstract

Information Disclosure and IPO Valuation: What Kinds of Information Matter and is More Information Always Better?

Cited by 1 publication

References 70 publications

IPO Underpricing and Prospectus Readability: A Machine Learning Approach

IPO Underpricing and Prospectus Readability: A Machine Learning Approach

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