Author : Elizabeth Demers
Publisher :
ISBN 13 :
Total Pages : 35 pages
Book Rating : 4.:/5 (129 download)
Book Synopsis The Marketing Role of Ipos by : Elizabeth Demers
Download or read book The Marketing Role of Ipos written by Elizabeth Demers and published by . This book was released on 2014 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores the potential marketing benefits of going public and of IPO underpricing. We identify an empirical setting which allows us to examine the impact of IPO underpricing on a direct and timely measure of the issuing firms' product market demand: visitors to B2C Internet companies' websites. If underpricing attracts media attention and creates valuable publicity, we expect an increase in web traffic following the IPO. Consistent with this hypothesis, we find that web traffic growth in the month after the IPO is positively and significantly associated with initial returns. Our analyses suggest that the marketing benefits of IPO underpricing for the B2C Internet firms in our sample are economically significant and that IPO underpricing may be less costly to B2C Internet firms than is indicated by the raw amount of money left on the table. We also investigate media reaction to initial returns for a broader sample of IPOs. Our evidence suggests that the marketing benefits of underpricing extend beyond the Internet sector and the quot;hot issuesquot; market of late 1990's.