The Role of the Media in the Launch of Internet Ipos

Bhattacharya , Utpal; Yu, Xiaoyun; Galpin, Neal; Ray, Rina

Download This Paper

Open PDF in Browser

Add Paper to My Library

The Role of the Media in the Launch of Internet Ipos

Betriebswirtschaftliche Forschung und Praxis, Forthcoming

28 Pages Posted: 19 Jun 2006

See all articles by Utpal Bhattacharya

Shanghai Jiao Tong University (SJTU) - Shanghai Advanced Institute of Finance (SAIF); European Corporate Governance Institute (ECGI); National University of Singapore (NUS) - Asian Bureau of Finance and Economic Research (ABFER); China Academy of Financial Research (CAFR)

Neal Galpin

Monash University - Department of Banking and Finance

Rina Ray

University of Colorado at Denver

There are 2 versions of this paper

Abstract

We document that there was media hype about internet stocks during the bubble. However, the media hype about internet stocks during the bubble was discounted: though the media coverage positively affected pre-IPO value revisions, it affected internet IPOs more than non-internet IPOs only after the bubble burst. Further, though the pre-IPO media coverage positively affected first-day returns only after the bubble burst, the effect on the internet IPOs was the same as the effect on the non-internet IPOs. This suggests that the media affect prices more in primary markets than in secondary markets. In both cases, the impact of the media is higher during bust times than during boom times.

Keywords: initial public offerings, media, underpricing, internet bubble

JEL Classification: E32, G14, G30

Suggested Citation: Suggested Citation

Bhattacharya, Utpal and Yu, Xiaoyun and Galpin, Neal E. and Ray, Rina, The Role of the Media in the Launch of Internet Ipos. Betriebswirtschaftliche Forschung und Praxis, Forthcoming, Available at SSRN: https://ssrn.com/abstract=908827