The Role of the Media in the Launch of Internet IPOs
2006, Betriebswirtschaftliche Forschung und Praxis
Utpal Bhattacharya, Neal Galpin, Rina Ray, Xiaoyun Yu
We document that there was media hype about internet stocks during the bubble. However, the media hype about internet stocks during the bubble was discounted: though the media coverage positively affected pre-IPO value revisions, it affected internet IPOs more than non-internet IPOs only after the bubble burst. Further, though the pre-IPO media coverage positively affected first-day returns only after the bubble burst, the effect on the internet IPOs was the same as the effect on the non-internet IPOs. This suggests that the media affect prices more in primary markets than in secondary markets. In both cases, the impact of the media is higher during bust times than during boom times.
Bhattacharya, Utpal, Neal Galpin, Rina Ray and Xiaoyun Yu (2006), “The Role of the Media in the Launch of Internet IPOs,” Betriebswirtschaftliche Forschung und Praxis, Vol. 58 (Special Issue on IPOs), pp. 442-456.