IPO Underpricing Factors: Technology and Non-Technology Sectors in Terms of Information Asymmetry and Retention of Control Theories
This study investigates the relationship between the underpricing of company stocks in initial public offerings (IPOs) and the key factors associated with two dominant theories: information asymmetry and retention of control. The main objective of the study is to determine which factors considered b...
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | Russian |
| Published: |
Government of the Russian Federation, Financial University
2025-06-01
|
| Series: | Финансы: теория и практика |
| Subjects: | |
| Online Access: | https://financetp.fa.ru/jour/article/view/3681 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1849690218286809088 |
|---|---|
| author | A. A. Galich A. G. Mirzoyan |
| author_facet | A. A. Galich A. G. Mirzoyan |
| author_sort | A. A. Galich |
| collection | DOAJ |
| description | This study investigates the relationship between the underpricing of company stocks in initial public offerings (IPOs) and the key factors associated with two dominant theories: information asymmetry and retention of control. The main objective of the study is to determine which factors considered by the two theories affect stock underpricing in the technology and non-technology sectors. Multiple regression models are used to identify the significant factors of underpricing for each sector, and the adjusted coefficient of determination is used to compare the explanatory power of the models of each theory. The sample includes 321 IPOs launched between 2000 and 2020 on the leading US exchanges NYSE and NASDAQ. The results show that in the technology sector, the significant predictors of underpricing are research and development (R&D) costs, the age of the company at the time of going public, and the Roll-up strategy. In the nontechnology sector, the key underpricing factors are the proportion of publicly traded shares and the age of the company. It is concluded that the theory of information asymmetry demonstrates the greatest explanatory power in the context of the technological sector, which indicates the significant influence of information barriers on the formation of market prices. At the same time, in the non-technology sector, the predictive power of regression models was significantly lower, which indicates the need for further search and analysis of additional factors affecting the undervaluation of shares in this sector. Thus, this study contributes to a deeper understanding of IPO undervaluation mechanisms, emphasizing the importance of taking into account the specifics of different industry segments when analyzing and forecasting market processes. |
| format | Article |
| id | doaj-art-0823a98d78494e5abb22cd9ae05d4a3c |
| institution | DOAJ |
| issn | 2587-5671 2587-7089 |
| language | Russian |
| publishDate | 2025-06-01 |
| publisher | Government of the Russian Federation, Financial University |
| record_format | Article |
| series | Финансы: теория и практика |
| spelling | doaj-art-0823a98d78494e5abb22cd9ae05d4a3c2025-08-20T03:21:23ZrusGovernment of the Russian Federation, Financial UniversityФинансы: теория и практика2587-56712587-70892025-06-01293455810.26794/2587-5671-2025-29-3-45-581274IPO Underpricing Factors: Technology and Non-Technology Sectors in Terms of Information Asymmetry and Retention of Control TheoriesA. A. Galich0A. G. Mirzoyan1Lomonosov Moscow State UniversityLomonosov Moscow State UniversityThis study investigates the relationship between the underpricing of company stocks in initial public offerings (IPOs) and the key factors associated with two dominant theories: information asymmetry and retention of control. The main objective of the study is to determine which factors considered by the two theories affect stock underpricing in the technology and non-technology sectors. Multiple regression models are used to identify the significant factors of underpricing for each sector, and the adjusted coefficient of determination is used to compare the explanatory power of the models of each theory. The sample includes 321 IPOs launched between 2000 and 2020 on the leading US exchanges NYSE and NASDAQ. The results show that in the technology sector, the significant predictors of underpricing are research and development (R&D) costs, the age of the company at the time of going public, and the Roll-up strategy. In the nontechnology sector, the key underpricing factors are the proportion of publicly traded shares and the age of the company. It is concluded that the theory of information asymmetry demonstrates the greatest explanatory power in the context of the technological sector, which indicates the significant influence of information barriers on the formation of market prices. At the same time, in the non-technology sector, the predictive power of regression models was significantly lower, which indicates the need for further search and analysis of additional factors affecting the undervaluation of shares in this sector. Thus, this study contributes to a deeper understanding of IPO undervaluation mechanisms, emphasizing the importance of taking into account the specifics of different industry segments when analyzing and forecasting market processes.https://financetp.fa.ru/jour/article/view/3681initial public offering (ipo)companyunderpricinguncertaintyprofitabilityissuerinformation asymmetry |
| spellingShingle | A. A. Galich A. G. Mirzoyan IPO Underpricing Factors: Technology and Non-Technology Sectors in Terms of Information Asymmetry and Retention of Control Theories Финансы: теория и практика initial public offering (ipo) company underpricing uncertainty profitability issuer information asymmetry |
| title | IPO Underpricing Factors: Technology and Non-Technology Sectors in Terms of Information Asymmetry and Retention of Control Theories |
| title_full | IPO Underpricing Factors: Technology and Non-Technology Sectors in Terms of Information Asymmetry and Retention of Control Theories |
| title_fullStr | IPO Underpricing Factors: Technology and Non-Technology Sectors in Terms of Information Asymmetry and Retention of Control Theories |
| title_full_unstemmed | IPO Underpricing Factors: Technology and Non-Technology Sectors in Terms of Information Asymmetry and Retention of Control Theories |
| title_short | IPO Underpricing Factors: Technology and Non-Technology Sectors in Terms of Information Asymmetry and Retention of Control Theories |
| title_sort | ipo underpricing factors technology and non technology sectors in terms of information asymmetry and retention of control theories |
| topic | initial public offering (ipo) company underpricing uncertainty profitability issuer information asymmetry |
| url | https://financetp.fa.ru/jour/article/view/3681 |
| work_keys_str_mv | AT aagalich ipounderpricingfactorstechnologyandnontechnologysectorsintermsofinformationasymmetryandretentionofcontroltheories AT agmirzoyan ipounderpricingfactorstechnologyandnontechnologysectorsintermsofinformationasymmetryandretentionofcontroltheories |