FIN 260 Lecture Notes - Lecture 61: Investment Banking, Monopsony, Buy Side
• Jay Ritter:
➢ Shows massive underwriting around the world.
o 1990 to 1998: Average underpricing for I.P.O.’s in U.S. was 14.8%.
o 1999 to 2000: Average underpricing for I.P.O.’s in U.S. was 51.4%.
o 2001 to 2009: Average underpricing for I.P.O.’s in U.S. was 12.1%.
o Over the last 50 years, I.P.O.’s in U.S. have been underpriced by 16.8% on
average.
▪ That’s more than $125 billion that companies have left on the table in
the last 20 years.
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