Do Institutions Receive Favorable Allocations in IPOs with Better Long-Run Returns?
We analyze allocations to institutional and retail investors in 441 initial public offerings (IPOs). In addition to the well-known favorable first-day returns, we show that institutions also obtain more allocations in IPOs with better long-term performance. We find that initial institutional flips h...
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2006
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sg-smu-ink.lkcsb_research-56622016-03-05T15:12:12Z Do Institutions Receive Favorable Allocations in IPOs with Better Long-Run Returns? Boehmer, Beatrice BOEHMER, Ekkehart Fishe, Raymond P. H. We analyze allocations to institutional and retail investors in 441 initial public offerings (IPOs). In addition to the well-known favorable first-day returns, we show that institutions also obtain more allocations in IPOs with better long-term performance. We find that initial institutional flips help predict future returns, suggesting that at least some institutions retain valuable private information about IPO firms. Collectively, these findings illustrate the importance of aftermarket relations between underwriters and investors and that underwriters have discretionary means to compensate IPO investors beyond first-day returns and price stabilization. 2006-12-01T08:00:00Z text https://ink.library.smu.edu.sg/lkcsb_research/4663 info:doi/10.1017/S0022109000002659 https://doi.org/10.1017/S0022109000002659 Research Collection Lee Kong Chian School Of Business eng Institutional Knowledge at Singapore Management University Business Corporate Finance |
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Business Corporate Finance Boehmer, Beatrice BOEHMER, Ekkehart Fishe, Raymond P. H. Do Institutions Receive Favorable Allocations in IPOs with Better Long-Run Returns? |
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We analyze allocations to institutional and retail investors in 441 initial public offerings (IPOs). In addition to the well-known favorable first-day returns, we show that institutions also obtain more allocations in IPOs with better long-term performance. We find that initial institutional flips help predict future returns, suggesting that at least some institutions retain valuable private information about IPO firms. Collectively, these findings illustrate the importance of aftermarket relations between underwriters and investors and that underwriters have discretionary means to compensate IPO investors beyond first-day returns and price stabilization. |
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text |
author |
Boehmer, Beatrice BOEHMER, Ekkehart Fishe, Raymond P. H. |
author_facet |
Boehmer, Beatrice BOEHMER, Ekkehart Fishe, Raymond P. H. |
author_sort |
Boehmer, Beatrice |
title |
Do Institutions Receive Favorable Allocations in IPOs with Better Long-Run Returns? |
title_short |
Do Institutions Receive Favorable Allocations in IPOs with Better Long-Run Returns? |
title_full |
Do Institutions Receive Favorable Allocations in IPOs with Better Long-Run Returns? |
title_fullStr |
Do Institutions Receive Favorable Allocations in IPOs with Better Long-Run Returns? |
title_full_unstemmed |
Do Institutions Receive Favorable Allocations in IPOs with Better Long-Run Returns? |
title_sort |
do institutions receive favorable allocations in ipos with better long-run returns? |
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Institutional Knowledge at Singapore Management University |
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2006 |
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https://ink.library.smu.edu.sg/lkcsb_research/4663 https://doi.org/10.1017/S0022109000002659 |
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