UNDERPRICING AND EX ANTE UNCERTAINTY IN IPOS: EVIDENCE FROM THE TUNISIAN STOCK MARKET

Abstract

In our paper, we use a sample of 33 IPOs listed on the Tunisian Stock Exchange (TSE) from 1994 to 2012 in order to study how the ex ante uncertainty affects the total and the involuntary underpricing. We find that the most underpriced firms are IT firms and those which choose the fixed price mechanism and have the little issue size and the lowest number of days between the prospectus registration and the first day of the subscription period. We also find that only the firm’s sector and the number of days between the prospectus registration and the first day of the subscription period affect involuntary underpcing.

Keywords

• initial public offering (ipo)
• ex ante uncertainty
• total underpricing
• involuntary underpricing