As an IPO marks the corporate event in which firm information is produced and disseminated for the first time, the efficiency of share pricing in this market is constantly questioned, scrutinized, and debated. In this short course, we cover the critical issues of how relevant information is generated in the IPO market and how selling mechanism and financial intermediaries can affect pricing efficiency of IPOs.
The course consists of three parts. First, it provides overview on theories and empirical evidence on IPO pricing, allocation, valuation and long-run underperformance. Second, the course discusses the IPO pricing mechanisms and the role of financial intermediaries (underwriters, analysts and venture capitalists) in the IPO market. Third, the course ends with a discussion on IPO cycles, corporate governance of newly public firms, and recent issues of IPO market.