IPO Pricing with Bookbuilding and a When-issued Market

Aussenegg, Wolfgang; Stomper, Alex; Pichler, Pegaret

doi:10.2139/ssrn.384920

Cited by 37 publications

(59 citation statements)

References 37 publications

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“…Dorn (2009), Aussenegg, Pichler, andStomper (2006) and Cornelli, Goldreich, and Ljungqvist (2006) examine pre-IPO markets that allow short selling and still find evidence that investor divergence of opinion is correlated with underpricing in the trading of IPOs. 12 Direct evidence on the costs of short selling is presented by D'Avolio (2002) and Geczy, Musto, and Reed (2002).…”

Section: Impact Of Short Sale Constraints On Ipo Pricingmentioning

confidence: 99%

Short selling in initial public offerings☆

Edwards

Hanley

2010

Journal of Financial Economics

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Section: Impact Of Short Sale Constraints On Ipo Pricingmentioning

confidence: 99%

Short selling in initial public offerings☆

Edwards

Hanley

2010

Journal of Financial Economics

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“…Aussenegg et al (2003) report that there were 158 IPOs in 1999 and 147 IPOs in 2000 on Frankfurt's Neuer Markt and Amtlicher Handel. By contrast, in 1961-82, Germany saw only 19 IPOs, an average of less than one firm each year, according to Stehle et al (2000).…”

Section: The Rise and Fall Of The Euro Nm Marketsmentioning

confidence: 99%

Differences between European and American IPO Markets

Ritter¹

2003

Euro Fin Management

261

144

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This brief survey discusses recent developments in the European initial public offering (IPO) market. The spectacular rise and fall of the Euro NM markets and the growth of bookbuilding as a procedure for pricing and allocating IPOs are two important patterns. Gross spreads are lower and less clustered than in the USA. Unlike the USA, some European IPOs, especially those in Germany, have when-issued trading prior to the final setting of the offer price. Current research includes empirical studies on the valuation of IPOs and both theoretical and empirical work on the determinants of short-run underpricing.

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“…We then analyze the interaction between bookbuilding and when-issued trading. This analysis provides a rationale for the findings of Aussenegg et al (2003). We…”

Section: Introductionmentioning

confidence: 88%

“…We will use this model to analyze whether the when-issued market can open, and whether both informed and uninformed investors will participate in trading. We will first derive a condition for this market to open, given that uninformed investors have access only to information that is contained in expression (1). If this condition is violated, when-issued trading fails to open.…”

Section: When-issued Tradingmentioning

confidence: 99%

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Primary Market Design: Direct Mechanisms and Markets

Stomper¹,

Pichler

2004

SSRN Journal

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SummaryWe develop a model that allows for the coexistence of bookbuilding and when-issued trading. We show that, due to interactions between these two processes, allowing for when-issued trading is for the most part beneficial for issuers. When-issued trading may interfere with information gathering thorough bookbuilding, in the case that informative bookbuilding is not needed. However, informative bookbuilding may be a prerequisite for the when-issued market to function. In this case the existence of a liquid when-issued market will not interfere with information gathering through bookbuilding, and will strictly benefit the issuer.

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IPO Pricing with Bookbuilding and a When-issued Market

Cited by 37 publications

References 37 publications

Short selling in initial public offerings☆

Short selling in initial public offerings☆

Differences between European and American IPO Markets

Primary Market Design: Direct Mechanisms and Markets

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