The underpricing of Brazilian IPOs and the adjustment to public and private information

The underpricing of Brazilian IPOs and the adjustment to public and private information

This paper examines the underwriters' treatment of information throughout the IPO pricing process based on a sample of Brazilian companies that went public between 2004 and 2011. There is evidence that the offer price partially incorporates the information contained into the Bovespa index during the book-building period, reacting symmetrically to upward and downward movements. The first-day return, as a result, is predictable on the basis of this information. Positive private information disclosed during the book-building period is also partially incorporated into the offer price. Issues priced above the midpoint of the initial price range are associated with higher initial returns.

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Main Author: Avelino,Ricardo R.G.
Format: Digital revista
Language:English
Published: Fundação Getúlio Vargas 2013
Online Access:http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402013000100001
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spelling oai:scielo:S0034-714020130001000012013-04-12The underpricing of Brazilian IPOs and the adjustment to public and private informationAvelino,Ricardo R.G. IPO Underpricing Partial Adjustment Book-Building This paper examines the underwriters' treatment of information throughout the IPO pricing process based on a sample of Brazilian companies that went public between 2004 and 2011. There is evidence that the offer price partially incorporates the information contained into the Bovespa index during the book-building period, reacting symmetrically to upward and downward movements. The first-day return, as a result, is predictable on the basis of this information. Positive private information disclosed during the book-building period is also partially incorporated into the offer price. Issues priced above the midpoint of the initial price range are associated with higher initial returns.info:eu-repo/semantics/openAccessFundação Getúlio VargasRevista Brasileira de Economia v.67 n.1 20132013-03-01info:eu-repo/semantics/articletext/htmlhttp://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402013000100001en10.1590/S0034-71402013000100001
institution SCIELO
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country Brasil
countrycode BR
component Revista
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databasecode rev-scielo-br
tag revista
region America del Sur
libraryname SciELO
language English
format Digital
author Avelino,Ricardo R.G.
spellingShingle Avelino,Ricardo R.G.
The underpricing of Brazilian IPOs and the adjustment to public and private information
author_facet Avelino,Ricardo R.G.
author_sort Avelino,Ricardo R.G.
title The underpricing of Brazilian IPOs and the adjustment to public and private information
title_short The underpricing of Brazilian IPOs and the adjustment to public and private information
title_full The underpricing of Brazilian IPOs and the adjustment to public and private information
title_fullStr The underpricing of Brazilian IPOs and the adjustment to public and private information
title_full_unstemmed The underpricing of Brazilian IPOs and the adjustment to public and private information
title_sort underpricing of brazilian ipos and the adjustment to public and private information
description This paper examines the underwriters' treatment of information throughout the IPO pricing process based on a sample of Brazilian companies that went public between 2004 and 2011. There is evidence that the offer price partially incorporates the information contained into the Bovespa index during the book-building period, reacting symmetrically to upward and downward movements. The first-day return, as a result, is predictable on the basis of this information. Positive private information disclosed during the book-building period is also partially incorporated into the offer price. Issues priced above the midpoint of the initial price range are associated with higher initial returns.
publisher Fundação Getúlio Vargas
publishDate 2013
url http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402013000100001
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