Underpricing

This chapter presents the results of a univariate and a multivariate analysis of underpricing. This chapter compares underpricing across different classifications of IPOs; VC-backed and non-VC-backed; hot and cold issue market; age (young and old), market capitalisation (small and big) and industry (high-tech and non-high-tech), respectively and extends the analysis by comparing underpricing between VC-backed IPOs and non-VC-backed IPO cross-classified by hot issue market, age, market capitalisation and industry. Moreover, this chapter compares the underpricing by the institutional type of VC-backing: bank-affiliated, security company-affiliated, other institution-affiliated and non-VC-backed. This comparison of underpricing by the institutional type of VC-backing is also cross-classified by hot issue market, age, market capitalisation and industry. In later sections in the chapter, the author compares the underpricing between hot market and cold market cross-classified by venture-capital-backing, age, market capitalisation and industry and report the result of multiple regressions on underpricing. Multiple regressions were carried out for IPOs in the whole sample period, IPOs in the hot market and IPOs in the cold market, respectively.