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IPO underpricing in the second and main markets: The case of the London Stock Exchange
Author(s) -
AcedoRamírez Miguel Á.,
DíazMendoza Ana C.,
RuizCabestre Francisco J.
Publication year - 2018
Publication title -
international finance
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.458
H-Index - 39
eISSN - 1468-2362
pISSN - 1367-0271
DOI - 10.1111/infi.12137
Subject(s) - initial public offering , listing (finance) , stock exchange , float (project management) , business , stock market , monetary economics , cross listing , economics , accounting , financial economics , financial system , finance , corporate governance , management , paleontology , horse , biology
This study contributes to a broader knowledge of initial public offerings (IPOs) underpricing in second and main markets. We analyse the particular case of the London Stock Exchange. In the second market, we distinguish between those companies that do not meet the main market listing requirements and those companies that, even though they meet the main market listing requirements, decide to float on the second market. The results show that there is less underpricing for firms that float on the main market than for companies listed on the second market regardless of whether those companies meet the main market listing requirements. Moreover, behind the underpricing, we find several variables related to firm and/or offering characteristics and market information and observe different behaviours in the explanatory variables for underpricing depending on the group to which the company belongs.