How Words in Summary Section of Form S-1 Influence IPO First-day Return, Post-IPO Operating Performance, and Process Time between Filing and Issuing
Date Issued
2016
Date
2016
Author(s)
Liu, Kuan-Yin
Abstract
While there exists a substantial amount of literature focusing on how concrete information in IPO prospectus influences IPO pricing, research concerning the relationship between abstract information and IPO pricing is still less and has not yet been developing since recently. I use the financial sentiment dictionary established by Loughran and McDonald to measure tones in the summary section of Form S-1 and examine how documents’ tone influence underpricing, post-IPO operating performance, and the process time between issuing and filing. I find that use word classification from Loughran and McDonald’s dictionary to predict IPO underpricing might have inconsistency and the connection between word in prospectus and first-day return might be nuanced. I also find little statistically significant correlation between tones in IPO prospectus and post-IPO operating performances, and the process time between filing and issuing.
Subjects
IPOs
textual analysis
sentiment analysis
underpricing
filings
Type
thesis