SAIF Seminar Series (13)
Topic: SAIF Seminar Series (13)
Time: Monday , 2010-09-13 12:00-08:00
Speaker: Jay Ritter
Affiliations: University of Florida
SAIF Seminar Series (13)
星期四,2010-09-13 10:30-12:00
Jay Ritter

Local Underwriter Oligopolies and IPO Underpricing
Introduction of the seminar:

Even though a large number of investment banks compete for initial public offerings (IPOs), we posit that the real competition takes place in a series of local oligopolies based on industry specialization. We develop a non-price competition theory of IPO underpricing based on localized competition and differentiated IPO underwriting services. We test our model implications on all-star analyst coverage, industry expertise, and other non-price dimensions.
Together, the non-price dimensions account for approximately 30% of the observed underpricing. Furthermore, we posit that venture capitalists (VCs) are especially focused on allstar analyst coverage, and develop the analyst lust theory of the underpricing of VC-backed IPOs. Consistent with this theory, we find that VC’s desire for all-star analyst coverage explains more than 50% of the effect of VC-backing on IPO underpricing.

Speaker Personal Information:
Research Interests: Initial Public Offerings, Asset Pricing, Valuation, and Investment Banking