Bookbuilding and Strategic Allocation

Journal of Finance - Tập 56 Số 6 - Trang 2337-2369 - 2001
Francesca Cornelli1, David Goldreich2
1Fuqua School of Business, Duke University; London Business School; and CEPR,
2London Business School

Tóm tắt

ABSTRACTIn the bookbuilding procedure, an investment banker solicits bids for shares from institutional investors prior to pricing an equity issue. The banker then prices the issue and allocates shares at his discretion to the investors. We examine the books for 39 international equity issues. We find that the investment banker awards more shares to bidders who provide information in their bids. Regular investors receive favorable allocations, especially when the issue is heavily oversubscribed. The investment banker also favors revised bids and domestic investors.

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