Terrorist attacks, investor sentiment, and the pricing of initial public offerings

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dc.contributor.authorChen, Yangyang
dc.contributor.authorGoyal, Abhinav
dc.contributor.authorVeeraraghavan, Madhu
dc.contributor.authorZolotoy, Leon
dc.date.accessioned2020-12-18T11:11:14Z
dc.date.available2020-12-18T11:11:14Z
dc.date.issued2020-11-07
dc.date.updated2020-12-18T10:53:14Z
dc.description.abstractUsing terrorist attacks as exogenous shocks to investor sentiment, we study the impact of investor sentiment on initial public offering (IPO) pricing. IPOs listed within the 30-day period following terrorist attacks, on average, experience lower first-day returns. The documented impact of terrorist attacks is magnified when there is greater IPO valuation uncertainty and when the terrorist attacks are more salient to investors, while mitigated for IPOs “certified” by reputable intermediaries. We also show that the affected IPOs, on average, have more pessimistic media tone in the post-attack/pre-listing day period. The affected IPOs also tend to have lower levels of price revisions, subscriptions, primary share revisions, and total proceeds. Collectively, our findings underscore the salience of investor sentiment in shaping IPO outcomes.en
dc.description.statusPeer revieweden
dc.description.versionAccepted Versionen
dc.format.mimetypeapplication/pdfen
dc.identifier.articleid101780en
dc.identifier.citationChen, Y., Goyal, A., Veeraraghavan, M. and Zolotoy, L. (2020) 'Terrorist attacks, investor sentiment, and the pricing of initial public offerings', Journal of Corporate Finance, 65, 101780 (26 pp). doi: 10.1016/j.jcorpfin.2020.101780en
dc.identifier.doi10.1016/j.jcorpfin.2020.101780en
dc.identifier.endpage26en
dc.identifier.issn0929-1199
dc.identifier.journaltitleJournal of Corporate Financeen
dc.identifier.startpage1en
dc.identifier.urihttps://hdl.handle.net/10468/10844
dc.identifier.volume65en
dc.language.isoenen
dc.publisherElsevieren
dc.relation.urihttp://www.sciencedirect.com/science/article/pii/S0929119920302248
dc.rights© 2020 Elsevier B.V. All rights reserved. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/en
dc.rights.urihttp://creativecommons.org/licenses/by-nc-nd/4.0/en
dc.subjectTerrorist attacksen
dc.subjectInvestor sentimenten
dc.subjectIPO pricingen
dc.titleTerrorist attacks, investor sentiment, and the pricing of initial public offeringsen
dc.typeArticle (peer-reviewed)en
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