Investment bankers and IPO pricing: Does prospectus information matter?

In this study, we examine those factors generally considered to impact IPO performance to assess the extent to which investment bankers might utilize this information in determining the spread within which the offering price is likely to be set and in setting the offering price. Interestingly, we find no evidence that the variables investigated are related to either IPO offer price spread or the IPO offer price. The implications of these findings are notable, as they raise the issue of what information might account for investment bankers' valuation decisions, as captured in the offer price spread and offer price.