The DOI matches its Crossref record; 1 of the 1 references it cites were found in a registry or an index.
Divergence of Opinion, Uncertainty, and the Quality of Initial Public Offerings
Open accessAbstract
Using a sample of 2,025 initial public offerings (IPOs) from 1993-1996, we examine the relation between the divergence of opinion among investors and the long-run performance of IPOs. We focus on three opening-day proxies for the uncertainty about an IPO: opening bid-ask spread, the time of first trade, and the flipping ratio. After controlling for issue quality, we find all three variables provide significant predictive ability to explain long-run IPO returns. Specifically, a large opening spread, a late opening trade, and a high flipping ratio are associated with poor long-run returns. Our findings are consistent with Miller (1977), who demonstrates that divergence of opinion leads to both short-run overvaluation and long-run underperformance of IPOs.
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Cites
Shleifer, A., & Vishny, R. W. (1997) · The Journal of Finance · doi:10.1111/j.1540-6261.1997.tb03807.x · Cited by 5,291
Cited by
A Review of IPO Activity, Pricing and Allocations
Ritter, J. R., & Welch, I. (2002) · SSRN Electronic Journal · doi:10.2139/ssrn.296393 · Cited by 466
Metadata
- Authors
- Houge, T., Loughran, T., Suchanek, G., & Yan, X.
- Venue
- Financial Management
- Publisher
- Wiley
- Published
- 2001
- Volume
- 30
- Issue
- 4
- Pages
- 5
- ISSN
- 0046-3892 (ISSN-L)
- OpenAlex
- W3125968772
- Cited by
- 158
- References
- 1
- FWCI
- 10.76
- Type
- journal article
- Language
- en
- Open access
- green
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