Abstract
This study examines agency and market signals related to a sample of high-technology firms seeking an initial public offering (IPO). We test a model of the IPO offer process in high-technology firms. Results indicate that certain pre-market and primary market factors affect the offer price received by entrepreneurs and investors, while the secondary market factor did not. Our model may help entrepreneurs position their organization prior to and during the IPO process.
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Notes
Underpricing is so prevalent that the term has become synonymous with initial returns or first-day returns (Dalton et al. 2003, p. 272; Ritter and Welch 2002, p. 1802). Though we do not mean to use the terms underpricing and mispricing interchangeably, we primarily discuss underpricing as it has been the dominant phenomenon.
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Williams, D.R., Duncan, W.J. & Ginter, P.M. Testing a model of signals in the IPO offer process. Small Bus Econ 34, 445–463 (2010). https://doi.org/10.1007/s11187-008-9130-1
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DOI: https://doi.org/10.1007/s11187-008-9130-1