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Full-Text Articles in Social and Behavioral Sciences
Does Underwriter Reputation Affect The Performance Of Ipo Stocks?, Chunchi Wu, Sheen Liu, Junbo Wang
Does Underwriter Reputation Affect The Performance Of Ipo Stocks?, Chunchi Wu, Sheen Liu, Junbo Wang
Research Collection Lee Kong Chian School Of Business
In this paper we examine the relationship between performance of the Chinese IPO firms and the reputation of investment bankers underwriting their stocks. Similar to previous studies on well-developed stock markets, we find that the initial return on the first day of trading is strongly positive for Chinese IPO stocks due to underpricing. This initial return is negatively related to the underwriter's reputation, suggesting that the better the reputation of the underwriter, the less underpricing and hence, the lower the initial return of the IPO stock. Extending the analysis to a ten-day window after the first trading day, we find …
The Complexity Of Price Discovery In An Efficient Market: The Stock Market Reaction To The Challenger Crash, Michael Maloney, J Mulherin
The Complexity Of Price Discovery In An Efficient Market: The Stock Market Reaction To The Challenger Crash, Michael Maloney, J Mulherin
Michael T. Maloney
We provide evidence on the speed and accuracy of price discovery by studying stock returns and trading volume surrounding the crash of the space shuttle Challenger. While the event was widely observed, it took several months for an esteemed panel to determine which of the mechanical components failed during the launch. By contrast, in the period immediately following the crash, securities trading in the four main shuttle contractors seemingly singled out the firm that manufactured the faulty component. We show that price discovery occurred without large trading profits and that much of the price discovery occurred during a trading halt …