Conroy-Price We examine the price discovery process of initial public offerings ~IPOs! using a unique dataset. The first quote entered by the lead underwriter in the five-minute preopening window explains a large roportion of initial returns even for hot IPOs. Significant learning and price scovery continues to take place during ese five minutes with hundreds of quotes being entered. […]
There is a strong positive relationship betweeninitial returns and the time of day when trading starts in an IPO