The Factors Of Chinese Gem IPO Underpricing Based On Lock-Up Period

The high rate of IPO underpricing will cause the domestic cash inflowing abnormally into primary market and hoarding there to have a high income without risk, which further pushed up the high premium IPO phenomenon, making the market regard the IPO underpricing as a huge risk-free way to grab the interest,even more on the entire stock market there are so many organizations of the so-called "new share subscription households", which has reduced the resource allocation function of the stock market, and also has destroyed the fairness of stock markets.Unlike other countries, part of China’s IPO which sold offline has a three-month lock-up period, greatly increasing the speculative atmosphere of the market. And the three-month lock-up period also means that in the first IPO day tradable shares traded only partially, so from this point of view, China’s IPO underpricing in the analysis and study generally have a great different from the abroad.In this context, based on our unique three-month lock-up period basic "situation", research on China’s IPO underpricing it has a very important practical significance. Because of the GEM market, there is no relation to the state-owned shares. There are a lot companies on high-tech, high-risk, which distinguishes it from the beginning of the motherboard market, but for practical development and financing for company, is the product of the market economy. Therefore it is significant to study on GEM companies IPO underpricing, which can more accurately identify the causes and factors that influence our IPO bargaining through research, help us further understanding IPO underpricing, also can provide a reference and a certain theoretical and practical significance for the underpricing of next stage that the implementation of registration system.Through this paper, we selected313companies listed on GEM from30October2009to May8days2012as the study sample, and combine the Offline Shares under the lock-up period as the "conditions" to our IPO underpricing study. Then we refer to researches for IPO underpricing, with statistical method such as multiple regression and VAR and impulse response to study the issue from the fact of information asymmetry and investor sentiment as well as underwriters perspective. This paper will figure out the result of the facts to IPO underpricing, and based on this we will also propose some suggestion to improve the market and lower the rate of the underpricing to have more effective financing.