The Effect of Investor Sentiment on IPO Pricing: Evidence From China

DOI

10.2991/aebmr.k.201211.071How to use a DOI?

Keywords

Initial public offering (IPO), hybrid auction, investor sentiment, offer price, underpricing

Abstract

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.

Copyright

© 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/).

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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  -