Bids and Allocations in European IPO Bookbuilding

Posted: 28 Nov 2003

See all articles by Tim Jenkinson

Tim Jenkinson

University of Oxford - Said Business School; European Corporate Governance Institute (ECGI)

Howard Jones

University of Oxford, Saïd Business School

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Abstract

This paper uses evidence from a dataset of 27 European IPOs to analyse how investors bid and the factors that influence their allocations. We also make use of a unique ranking of investor quality, associated with the likelihood of flipping the IPO. We find that investors perceived to be long-term holders of the stock are consistently favored in allocation and in out-turn profits. In contrast to Cornelli and Goldreich (2001), we find little evidence that more informative bids receive larger allocations or higher profits. Our results cast doubt upon the extent of information production during the bookbuilding period.

Keywords: IPO, bookbuilding

JEL Classification: G14, G24

Suggested Citation

Jenkinson, Tim and Jones, Howard, Bids and Allocations in European IPO Bookbuilding. Available at SSRN: https://ssrn.com/abstract=465100

Tim Jenkinson (Contact Author)

University of Oxford - Said Business School ( email )

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HOME PAGE: http://www.sbs.oxford.edu/timjenkinson

European Corporate Governance Institute (ECGI)

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Howard Jones

University of Oxford, Saïd Business School ( email )

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Oxford, OX1 1HP
Great Britain

HOME PAGE: http://www.sbs.ox.ac.uk/about-us/people/howard-jones

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