Should Federal Law Regulate Short Selling by Underwriters in IPOs? Lessons from a New Behavioral Theory of IPO Pricing

Courtesy of Patrick M. Corrigan Since 1980, the average stock price of IPO firms has popped about 18 percent over the offering price on the first day of trading. This well-known phenomenon constitutes the basis of the IPO underpricing puzzle. Snapchat and its selling stockholders, to take one example, left almost $1.75 billion on the […]