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IPO Pricing with Bookbuilding and a When-Issued Market

Published online by Cambridge University Press:  06 April 2009

Wolfgang Aussenegg
Affiliation:, Vienna University of Technology, Department of Finance and Corporate Control, Vienna, Austria
Pegaret Pichler
Affiliation:, Institute for Advanced Studies, Vienna, Austria
Alex Stomper
Affiliation:, Institute for Advanced Studies, Vienna, Austria.


We study IPO pricing in Germany to determine whether when-issued trading provides information that is useful for setting IPO offer prices, and whether such trading supplants bookbuilding as a source of information. We find that when-issued trading reveals relevant information for pricing IPOs, and that, once when-issued trading has begun, bookbuilding is not a source of costly information for pricing. But bookbuilding does not appear to be fully supplanted as a source of pricing information. We find evidence consistent with bookbuilding being used to gather information prior to the onset of when-issued trading.

Research Article
Copyright © School of Business Administration, University of Washington 2006

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