Abstract
The Amsterdam Stock Exchange permits initial public offerings to be made in various ways. The price adjustment following the introduction is analysed and the differences between methods tested. Although one method in particular seems to produce severe underpricing and thus is a source of potential excess returns for investors, we could not find evidence that investors are able to predict which issues are likely to be underpriced. The paper concludes that the market appears to function quite efficiently even though the question why some firms should choose to underprice their shares remains unanswered.
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© 1989 Springer-Verlag Berlin Heidelberg
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Wessels, R.E. (1989). The Market for Initial Public Offerings. An analysis of the Amsterdam Stock Exchange (1982–1987). In: Guimarães, R.M.C., Kingsman, B.G., Taylor, S.J. (eds) A Reappraisal of the Efficiency of Financial Markets. NATO ASI Series, vol 54. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-74741-0_20
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DOI: https://doi.org/10.1007/978-3-642-74741-0_20
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