New "feel Broken Damp" Impact On The Ipo Pricing Efficiency Of Empirical Research

ince the applying of the inquiry system in IPO pricing on January1,2005, the IPO had been underpriced. On June10,2009, CSRC(China Securities Regulatory Commission) continuingly pushed forward the reform of the IPO system in order to reduce the administrative guidance on IPO pricing. Since then, The PE ratio for IPOs unceasingly rises, exceeding the affordability of the secondary market. This finally led to a wide range of overpriced of IPOs in2010and2011.Started at the IPO overpricing phenomenon, this paper makes a depth analysis of the status quo of IPO overpricing, using qualitative and quantitative methods in many aspects. It unearthsthe reasons for IPO overpricing. Then this paper explores how the gaming of different parties leads to the overpricing of IPOs.The theme of this paper is the influences of IPO overpricing phenomenon on efficiency of IPOpricing. The logic of the research is based on the follows:(1)CRSC stop the administrative guidance on IPO pricing in2009. Without the market constraint mechanism in place, the valuation for IPOs keeps increasing, even exceeding the intrinsic value of some companies, thus lead to the overpriced of the IPO.(2)The IPO overpricing phenomenon in turn reacts to the IPO pricing mechanism on the primary stock market, this may lead to increasing the efficiency of IPOpricing.The paper makes an empirical comparison of whether the IPO pricing efficiency has significant improved before and after the IPO overpricing phenomenon to determine the impact of IPO overpricing phenomenon on IPO pricing efficiency. It selects the IPO cases between2005and2009as the sample before the IPO overpricing phenomenon, and the cases in2010and2011as the sample during the IPO overpricing. This paper compares the IPO pricing efficiency of these two samples from the absolute and relative standard of efficiency of IPO pricing.After the research, the conclusion can be drawn that the IPO overpricing phenomenon do not result in the increasing of IPO pricing efficiency no matter in absolute or relative standard of efficiency of IPO pricing. The positive significance of IPO overpricing is reflected in the facts the IPO overpricing lead to a structural improvement on IPO pricing mechanism.