AFFI International Conference 2017

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Media Coverage and the Decision to Withdraw an IPO

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We examine and provide evidence on the impact of pre-IPO media coverage on the decision to withdraw an IPO. Using a sample of 2,084 completed and withdrawn IPOs between January 1998 to December 2013, we fi nd that optimism media tone has a negative impact on the probability of withdrawn and that a one percent increase in the media coverage results in a 34% increase in the probability of withdrawn. Our results support
the retail attention hypothesis highlighted by Barber and Odean (2008) and confi rm that even if media coverage does not supply genuine news, it plays a signi cant role in explaining the decision to go public.

Author(s):

Jean-Yves Filbien    
University of Lille
France

Diego Amaya    
Wilfried Laurier University
Canada

Maher Kooli    
ESG UQAM
Canada

 

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