The Effect of Investor Sentiment on IPO Pricing: Evidence From China
- 10.2991/aebmr.k.201211.071How to use a DOI?
- Initial public offering (IPO), hybrid auction, investor sentiment, offer price, underpricing
Previous literature mainly investigates the effect of investor sentiment in the bookbuilding, and little evidence proves the role of investor sentiment in the hybrid auction. In this paper, I provide empirical evidence to answer how pre-IPO investor sentiment affects the IPO pricing process in the hybrid auction mechanism. Empirical results show that underwriters tend to raise the mid-point of the price range when investor sentiment is high. As a result, higher investor sentiment leads to higher offer prices and lower underpricing. The results highlight the important role of investor sentiment in the hybrid auction and have implications for regulators.
- © 2020, the Authors. Published by Atlantis Press.
- Open Access
- This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).
Cite this article
TY - CONF AU - Jingbin He PY - 2020 DA - 2020/12/14 TI - The Effect of Investor Sentiment on IPO Pricing: Evidence From China BT - Proceedings of the Fifth International Conference on Economic and Business Management (FEBM 2020) PB - Atlantis Press SP - 413 EP - 419 SN - 2352-5428 UR - https://doi.org/10.2991/aebmr.k.201211.071 DO - 10.2991/aebmr.k.201211.071 ID - He2020 ER -