The Informational Content of Initial Public Offerings

Ian Gale, Joseph Stiglitz

The ability of capital markets to distinguish firms of different value by the size of their initial equity offerings is attenuated when insiders can sell equity more than once. A model is developed in which there is price risk from holding equity between periods. When the uncertainty is small. there must be pooling in the first period. When uncertainty is large. the pooling equilibria dominate the separating equilibrium

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Year of publication:	February 1990
Authors:	Gale, Ian
Other Persons:	Stiglitz, Joseph (contributor)
Institutions:	National Bureau of Economic Research (contributor)
Publisher:	Cambridge, Mass : National Bureau of Economic Research
Subject:	Emissionsgeschäft \| Underwriting business \| Theorie \| Theory \| Börsengang \| Initial public offering \| Informationsökonomik \| Economics of information \| Informationswert \| Information value \| Eigenkapital \| Equity capital

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