It has been controversial for the formation mechanism of IPO initial returns anomaly. The underpricing explanation based on asymmetric information is well accepted, but could not explains that in emerging markets; the overvaluation explanation based on behavioral finance has more applicability in emerging markets, but cannot be supported well by empirical test because of the difficult of explanatory variables. This paper analyzes the four main possibility of the formation mechanism of IPO initial returns, and chooses the issue PE ratio as the proxy to do empirical test of the IPO pricing efficiency with a sample of Chinese IPOs during 1998-2007, based on the stochastic frontier models, as to provide the new evidence of the overvaluation explanation of Chinese IPO initial returns indirectly.
This paper presents a model for the underpricing of initial public offerings. The argument depends upon the existence of a group of investors whose information is superior to that of the firm as well as that of all other investors. If the new shares are priced at their expected value, these priveleged investors crowd out the others when good issues are offered and they withdraw from the market when bad issues are offered. The offering firm must price the shares at a discount in order to guarantee that the uninformed investors purchase the issue.
Evaluation of ventricular performance is essential in the diagnosis and long-term management of patients with heart disease. This can be most easily performed clinically using simple tools. When more definitive objective assessment of cardiac function is indicated, the equilibrium gated blood pool study provides reliable angiographic evaluation of the heart. It will continue as a mainstay in the armamentarium of cardiology.