Media Coverage Influence on Initial Public Offerings (IPO)

Abstract

This paper introduces the IPO (Initial Public Offering) for the enterprises which want to go public, and discusses the role of media in this process. Prior research found the correlation between media reports and IPO underpricing by the uncertainty of events reported by the media. And researchers found that the media time and media reputation in financial news reports also have the potential impact on IPO. This paper summarizes the influence of media in IPO from these three aspects, conclude that positive media tones provides greater investment possibilities and they also found that before and after the IPO stage, the closer the news is to the IPO date will bring greater public impact and on the IPO date, the time does not matter. About the media reputation, a good media reputation can promote the share price of an IPO. However, in the unpredictable media environment, researchers still need more exploration to help managers make correct decisions under the trend of increasing IPO activities.