A Theory of IPO Pricing using Tender Prices

Publication Type

Journal Article

Publication Date

1999

Abstract

Initial Public Offerings (IPOs) are an integral part of market capitalization, and the pricing of such offerings have been theorized considerably. New methods of IPOs often bring new insights to existing theories. This paper studies a new form of IPO with French tenders, and proposes an information theory to explain the strike price and the listing price premia. An outcome of the model is that it shows how informed investors' excess returns in traditional IPOs may be dissipated under competitive French tendering. [ABSTRACT FROM AUTHOR]

Discipline

Finance and Financial Management | Portfolio and Security Analysis

Research Areas

Finance

Publication

Applied Financial Economics

Volume

9

Issue

5

First Page

433

Last Page

442

ISSN

0960-3107

Identifier

10.1080/096031099332096

Publisher

Taylor and Francis

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