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Neus, W. Börseneinführungen, Underpricing und die Haftung von Emissionsbanken. Credit and Capital Markets – Kredit und Kapital, 29(3), 428-455. https://doi.org/10.3790/ccm.29.3.428
Neus, Werner "Börseneinführungen, Underpricing und die Haftung von Emissionsbanken" Credit and Capital Markets – Kredit und Kapital 29.3, 1996, 428-455. https://doi.org/10.3790/ccm.29.3.428
Neus, Werner (1996): Börseneinführungen, Underpricing und die Haftung von Emissionsbanken, in: Credit and Capital Markets – Kredit und Kapital, vol. 29, iss. 3, 428-455, [online] https://doi.org/10.3790/ccm.29.3.428

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Börseneinführungen, Underpricing und die Haftung von Emissionsbanken

Neus, Werner

Credit and Capital Markets – Kredit und Kapital, Vol. 29 (1996), Iss. 3 : pp. 428–455

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Article Details

Author Details

Werner Neus, Tübingen

References

  1. Allen, Franklin/Faulhaber, Gerald R. (1989): Signaling by Underpricing in the IPO Market, in: Journal of Financial Economics, Vol. 23, S. 303 - 323.  Google Scholar
  2. Baron, David P. (1982): A Model of the Demand for Investment Banking Advising and Distribution Services for New Issues, in: Journal of Finance, Vol. 37, S. 955 - 976.  Google Scholar
  3. Baron, David P./Holmström, Bengt (1980): The Investment Banking Contract for New Issues under Asymmetric Information: Delegation and the Incentive Problem, in: Journal of Finance, Vol. 35, S. 1115 - 1138.  Google Scholar

Abstract

Initial Public Offerings, Underpricing and Underwriter Liability

Underpricing of initial public offerings may, inter alia, be explained by an informational advantage of certain investors whilst poorly informed investors are subject to a winner’s curse. Such underpricing may be reduced by improving the quality of the information available to poorly informed investors. Underwriter activities aimed at furnishing information and at certification are appropriate to this end as a matter of principle. The banks’ liability for the truthfulness of prospectuses signals to investors that there are incentives to the bank for carrying out this kind of activities. It is demonstrated that this actually reduces underpricing (after litigation costs, where appropriate). A consistent argumentation also shows that unconditional insurance of investors may abolish any kind of underpricing: a solution irreconcilable with the predominant practice-based perceptions.