An Empirical Study Of Investor Emotion And Information Uncertainty On IPO Underpricing

The 2017 Central Economic Work Conference pointed out that in order to revitalize the real economy,we should focus on high quality and core competitiveness,adhere to innovation-driven development,and expand the supply of high-quality products and services.Financial market provides a variety of financing channels for the real economy,and has the function of serving the real economy.The real economy and the financial market are interdependent.As one of the bridges between the financial market and the real economy,IPO is the most attractive part of the stock market.The phenomenon of IPO initial trading price is higher than its initial issue price,that is,IPO underpricing.In China's stock market,under-pricing of new shares,high long-term pricing and hot issuing market are especially prominent.Because of the persistence of high underpricing of new stocks in China,the probability of loss after winning the lottery is very low.It seems that the bidding for new stocks has become a disguised lottery behavior.It has become the consensus of investors that the new stocks can not be defeated.The phrases such as "continuous rising and stopping","several times higher" and "making tens of thousands of dollars by signing a contract" are all stimulating investors' speculative sentiment,which will turn "all the people invest" into "all the people speculate".The high IPO underpricing rate is harmful to the capital market.Firstly,the high IPO underpricing rate weakens the function of resource allocation in the capital market,which affects the financing efficiency of the high-quality enterprises,and makes the low-quality enterprises only attempt to list under-pricing.High underpricing leads to the phenomenon of "the trend of subscription for new shares" in the market,which increases the speculative atmosphere and market volatility.Thirdly,after a period of time,the stock price will encounter a long period of "depression" after a sharp rise,which will also affect the operation of listed companies and the interests of investors in the secondary market..Therefore,in order to reduce the IPO Underpricing and better play the role of capital market resource allocation,many scholars have studied the underpricing mechanism from various angles.This paper reviews the domestic and foreign literature on IPO underpricing,combs the institutional changes of China's stock issuance and IPO status quo,while considering investor sentiment and uncertainty of information two aspects,IPO underpricing in-depth study.This paper chooses eight indirect variables which can reflect the market sentiment to do principal component analysis,and takes the results as a comprehensive index of investor sentiment.At the same time,it selects the quality of accounting information as the proxy variable of information uncertainty as the influencing factor of IPO underpricing.Because of the frequent changes in the IPO system in China,and the latest IPO restart in the second half of 2016,this paper studies the relationship between investor sentiment,information uncertainty and IPO underpricing based on the data of 454 IPO companies from August 2016 to November 2017.The results show that,firstly,the higher the investor sentiment,the higher the IPO underpricing level;secondly,the stronger the level of information uncertainty,the higher the level of IPO underpricing;thirdly,the higher the uncertainty of corporate information,the more easily the IPO underpricing is affected by investor sentiment;fourthly,through the analysis of long-term IPO returns,we find that IPO underpricing,investment Underpricing Investor sentiment and information uncertainty are negatively correlated with the long-term return of IPO,indicating that investor sentiment and information uncertainty will unreasonably push up the stock price,and demonstrating the impact of investor sentiment and information uncertainty on IPO underpricing.