Media exposure and underpricing : IPO underpricing and media coverage in the time prior to and after going public

Abstract

I examine the relationship between IPO underpricing and media exposure, using a sample of 54 IPOs launched on the Oslo Stock Exchange in the period of 2003-2006. I use the A-tekst database to measure media exposure, using four observation periods relative to the IPO. The findings show that there is a negative relationship between underpricing and media coverage in the IPO subscription period. Furthermore, I show that underpricing increases publicity in the time after the listing. However, the study fails to find any significant relationship between underpricing and media coverage in the week prior to going public.