| “Does Law Affect IPO Underpricing” assesses the effects of various legal characteristics of a country on the underpricing of IPOs in that country. A cross-sectional estimation framework is applied to a sample of 32 countries. Litigation risk, antidirector rights, and IPO pricing restrictions are found to be significant variables affecting IPO underpricing, supporting the IPO underpricing theories of litigation risk and ownership dispersion.; “Direct Public Offerings and the New Issues Puzzles” seeks to examine the asset pricing behavior of direct public offerings [DPOs]. The sample consists of 49 DPOs issued from 1991 to 1998 with next-day aftermarket data. Equal-weighted returns do not show initial underpricing in DPOs, whereas size-weighted and proceeds-weighted returns show initial negative returns (overpricing). Simple calendar time figures cast doubt upon “hot issue” effects in DPOs. Long-run returns of DPOs demonstrate underperformance characteristically seen in small IPOs.; “Does Ticker Reassignment Cause Investor Confusion?” examines behavior reminiscent of a financial bubble surrounding a change in an equity's ticker symbol. The sample consists of 41 OTC “Bulletin Board” firms that relinquished their ticker symbols to listed exchange-traded equities during 1998–1999. Abnormal changes in price, volume, and bid-ask spread exist throughout the sample, with the greatest effects exhibited by OTCBB stocks that lost tickers symbols only shortly before subsequent adoption of that ticker symbol by another firm. |
