Some stock exchanges, such as the Spanish Stock Exchange and Euronext (Paris), allow traders to place orders in a ‘pre-opening’ period. Orders placed in this period are used to determine the opening price, and can be cancelled at any moment and at no cost by the traders. We consider a model...

A reverse merger (RM) is a technique in which a private company is acquired by a shell or defunct public company via stock swap. As a result, the private company becomes public. The main difference between an IPO and a RM is that an IPO allows going public and also allows raising capital while...