What is the impact of asymmetric information on the success IPO?
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Asymmetric information in initial public offerings (IPOs) can impact their success. Research suggests that IPOs tend to be underpriced, meaning that the offer price is lower than the market value, due to information asymmetry . The degree of information asymmetry can be influenced by factors such as ownership concentration and investor sentiment . However, more opportunities for information disclosure and dissemination can help overcome this asymmetry and reduce underpricing . Factors such as longer IPO process times and increased firm age can provide more opportunities for disclosure and dissemination, leading to improved outcomes . Additionally, lock-up ratios, which serve as a signaling tool to minimize conflicts between insiders and uninformed investors, can be influenced by factors such as underwriter reputation and market capitalization . Overall, understanding and addressing the impact of asymmetric information is crucial for optimizing the valuation and pricing of IPOs.
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| Papers (5) | Insight |
|---|---|
9 Citations | The provided paper does not directly address the impact of asymmetric information on the success of an IPO. The paper focuses on the asymmetric effect of media tone on IPO underpricing and volatility. |
10 Citations | The provided paper does not directly address the impact of asymmetric information on the success of an IPO. |
| The paper states that private acquisitions by startups before an IPO can serve as positive signals for startup qualities and reduce IPO underpricing. This suggests that information asymmetry can impact the success of an IPO. | |
10 Citations | The paper does not directly address the impact of asymmetric information on the success of an IPO. The paper focuses on the influence of investor sentiment on IPO pricing and the first-day income. |
| The provided paper does not directly address the impact of asymmetric information on the success of an IPO. |
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