Rookies Attracting Rookies
2016 (English)Conference paper (Refereed)
This paper studies initial public offerings (IPOs) and the individual shareholders of IPO firms, with a focus on IPO investment decisions of individual investors (rookies) entering the stock market. The study, which uses a hand-collected dataset of IPOs and an ultimate ownership registry of all Swedish shareholders, analyzes the IPO investment decisions of rookies. This paper aims to analyze IPO investor characteristics but mainly focuses on the importance of IPOs in attracting stock market rookies. The results show that rookies investing in IPOs hold larger portfolios and have higher income than other rookies, indicating sophistication among IPO rookies compared with other rookies. Moreover, the proportion of IPO investors among rookies is compared to that of non-rookies, showing that IPOs attract rookies to a larger extent than non-rookies. IPOs therefore seem to play a previously overlooked role of attracting rookies to the stock market.
Place, publisher, year, edition, pages
IPO, Rookies, Ownership, Individual Investors, Behavioral Finance
Research subject Business Studies
IdentifiersURN: urn:nbn:se:uu:diva-283457OAI: oai:DiVA.org:uu-283457DiVA: diva2:919160
52nd Eastern Finance Annual Meeting, Baltimore, Maryland