IPO Returns: Pre And Post Dotcom Bubble

Abstract

This study inspects the relative first-day returns of tech/internet IPOs before, during, and after the 1999-2000 dotcom “bubble” to investigate whether market inefficiency and agency conflicts were resolved. Using IPOs during the 1990 to 2004 period, we discover significant reversals in underpricing of internet IPOs following the large-scale investigation of IPO valuation practices led by New York State Attorney General Elliot Spitzer.