Media Coverage and the Decision to Withdraw an IPO

We examine the impact of pre-initial public offering (IPO) media coverage on the decision to withdraw an IPO. Using a sample of 2592 U.S. completed and withdrawn IPOs between January 1998 and December 2011, we find that media coverage and media tone are significantly negatively related to the probability of withdrawal. We also find that even when media coverage does not supply new information during the IPO process, it plays a significant role in disseminating investors' beliefs about firm valuations, which relate to the final outcome of this process. We examine the price range changes during the filing process as a proxy for changes in investors' initial demand and find that downward price changes are related to the intensity of media coverage