Does prospectus information matter in IPO pricing?
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The purpose of this study is to identify selected information from the prospectus that might signal the initial public offering (IPO) offer price. The results tend to provide support for the argument that firms with Shariah-compliant status reflect lower uncertainty and project better signalling of quality due to greater scrutiny by the government and thus are able to offer IPOs at higher prices. Similarly, firms with a higher proportion of shareholder retention indicate lower risks as insiders forego their options to diversify their portfolio, and hence could price their IPOs higher. Finally, the involvement of institutional investors and higher underwriter ranking could be used by firms to disregard information asymmetry, and therefore, the issuer might have to discount the IPO offer price.
Shariah , Quantile , Fixed price , Malaysian IPOs , Offer price , Quadratic
Mohd-Rashid, R., Mohammed Masih, A. M, Abdul-Rahim, R., & Che-Yahya, N. (2018). Does prospectus information matter in IPO pricing? Journal of Islamic Accounting and Business Research, 9(4), 514-530. https://doi.org/10.1108/JIABR-10-2017-0146
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