I bank escorts leaders of firm around to meet big

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I-bank escorts leaders of firm around to meet big institutional investors to generate interest in the offering. Shares are allocated according to interest If a firm wishes to get shares, it must indicate its optimism.
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Two IPO Puzzles IPO stocks experience on average large returns on the first day of trading. Very strong result. IPO stocks under-perform over the next five years. Not sure I believe this one. Others do.
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Average First-Day Returns
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Money Left on Table Money Left on Table = (Closing Price – Opening Price)*(Shares Issued)
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IPO First Day Returns Firms depend on the road show to get information from big investors about how the market might receive the issue. Often adjust the opening price according to the level of interest expressed during road show. To entice big investors to truthfully reveal information Allocate more shares to those who express stronger interest Offer the shares at a “discount”
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  • Fall '10
  • BrianBoyer
  • Interest, different borrowing, Financial Markets

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