IPO characteristics and underprincing in the Alternative Investment Market

  1. Acedo-Ramírez, M.Ã. 1
  2. Ruiz-Cabestre, F.J. 1
  1. 1 Universidad de La Rioja
    info

    Universidad de La Rioja

    Logroño, España

    ROR https://ror.org/0553yr311

Revista:
Applied Economics Letters

ISSN: 1350-4851

Año de publicación: 2017

Volumen: 24

Número: 7

Páginas: 485-489

Tipo: Artículo

DOI: 10.1080/13504851.2016.1205713 SCOPUS: 2-s2.0-84984670496 WoS: WOS:000393878700010 GOOGLE SCHOLAR

Otras publicaciones en: Applied Economics Letters

Resumen

This study contributes to broadening knowledge concerning the underpricing of initial public offerings (IPOs) in second markets. In particular, we analyse the price formation process of IPOs on the first trading day for a sample of 567 IPOs placed in the London’s Alternative Investment Market. Our findings, after stating that underpricing is significantly positive, show that price variation, observed through the underpricing variable, is related to several offer-specific characteristics, such as subscription proportion, offering price and share adjustment. Underpricing is also related to several control variables (offering size, previous IPO number and previous market return). © 2016 Informa UK Limited, trading as Taylor & Francis Group