A copy of this work was available on the public web and has been preserved in the Wayback Machine. The capture dates from 2017; you can also visit the original URL.
The file type is
The Role of Uninformed Investors in an Optimal Ipo Mechanism
Social Science Research Network
This paper explores optimal ways for a firm to sell its initial public offering (IPO) to a mix of informed and uninformed investors through an intermediary. I argue that uninformed investors provide a benchmark for informed investors, resulting in an endogenous constraint that affects the issuer's revenue. I conclude that higher revenues are achieved with higher numbers of uninformed investors participating in an IPO. Furthermore, the intermediary serves as the only credible provider ofdoi:10.2139/ssrn.687167 fatcat:mqo47dhzgjhpzlzn77i5usgnrq