Deliberate Discounts and Underpricing of Turkish IPOs
Öz
This study investigates underpricing and deliberate discounts in a unique sample of 113 initial public offerings at Borsa Istanbul. Using pre-issue prospectuses and valuation reports, this study documents the degree of optimism, underwriter discounts and their association with initial returns. We hypothesise that first day returns should be proportional to the percentage discounts offered if value estimates are unbiased and deliberate discounts reflect fair value. The findings indicate that offered discounts are not proportional to the degree of optimism in value estimates, as share prices do not recover on the first day as much as percentage price discounts. Tests also show that optimistic value estimates are associated with larger price discounts and price discounts are negatively related to initial returns.
Anahtar Kelimeler
Kaynakça
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