Expected Firm Performance and IPO Price Formation.

Financial Statement Analysis;Initial Public Offerings (IPO);Accounting;Business and Economics;Business Administration

Hendricks, Bradley EricDittmar, Amy K. ;

University of Michigan

关键词: Financial Statement Analysis;    Initial Public Offerings (IPO);    Accounting;    Business and Economics;    Business Administration;   

Others  :  https://deepblue.lib.umich.edu/bitstream/handle/2027.42/113325/bhendrix_1.pdf?sequence=1&isAllowed=y

瑞士|英语

来源: The Illinois Digital Environment for Access to Learning and Scholarship

【 摘 要 】

This study examines how accounting information influences investors’ evaluations of IPO firms. Specifically, I examine whether a simple financial statement analysis process that provides information about the future prospects of IPO firms is useful in explaining the investor feedback that issuing firms receive during the bookbuilding portion of the IPO process. I find that this information about an IPO firm’s prospects is not fully captured in the price that the underwriter proposes for the offering and that investors use the bookbuilding process to adjust the proposed price to more fully reflect this information. I also show that investors’ use of this accounting information improves the accuracy of IPO pricing. Finally, I show that this information is more likely to be fully impounded into the final offer price when there is greater participation from institutional investors in the bookbuilding process. These findings highlight the value that investors associate with an IPO firm’s accounting information and reveal that the price revision is much more predictable than suggested by the extant literature.