IPO Underpricing, Post-Listing Liquidity, and Information Asymmetry in the Secondary Market.

Abstract

Using a ten-year sample of IPOs undertaken on Euronext with various mechanisms, our study examines the relationship between initial returns and post-listing liquidity, and tests whether it is influenced by ownership structure and information asymmetry. According to most of our findings, post-listing liquidity is positively related to initial underpricing, but we fail to prove that this relation is formed through ownership dispersion. It is more likely attributable to the interest underpriced stocks generate. Information asymmetry is negatively linked to the level of initial underpricing, suggesting that more public information is produced on more underpriced IPOs.IPO; information asymmetry; post-listing liquidity; initial underpricing; ownership structure;