xxiv Contents of Volume 1
- Security offerings and market timing 330
5.1. Timing theories with rational market pricing 330
5.2. Timing theories with non-rational market pricing 336
5.3. Evidence on long-run post-issue stock returns 339
5.4. Robustness issues 350 - Conclusions and issues for future research 355
References 361
Chapter 7
IPO Underpricing
ALEXANDER LJUNGQVIST 375
Abstract 376
Keywords 377
- Introduction 378
- Evidence of underpricing 381
- Asymmetric information models 384
3.1. The winner’s curse 384
3.2. Information revelation theories 389
3.3. Principal-agent models 396
3.4. Underpricing as a signal of firm quality 400 - Institutional explanations 402
4.1. Legal liability 402
4.2. Price stabilization 405
4.3. Tax arguments 408 - Ownership and control 408
5.1. Underpricing as a means to retain control 409
5.2. Underpricing as a means to reduce agency costs 411 - Behavioral explanations 412
6.1. Cascades 412
6.2. Investor sentiment 414
6.3. Prospect theory and mental accounting 416 - Concluding remarks 417
References 418
Chapter 8
Conglomerate Firms and Internal Capital Markets
VOJISLAV MAKSIMOVIC and GORDON PHILLIPS 423
Abstract 424
Keywords 424
- Introduction 425
- The conglomerate discount 426
2.1. Documenting the discount: Early research 426
2.2. Initial caveats: The data 430