Vol.29 Issue.1, 2010

  • The Charisma Initial Public Offerings and Investors’ Irra- tional Behavior

Authors: Chao-Shi Wang

Pages: 103-106

Publish date: 2010/01/01

Download: PDF

Abstract

Compared with previous researches which classified IPOs’ characters through market’s response of subscription, this paper provides a new concept - charisma taking value relevant factors into discussion to investigate whether investors’ behavior is rational. This research defines charisma IPOs as those which investors are fond of. A charisma IPOs can draw investors’ participation without comparative advantage in value relevant factors, and then evoke a hot subscription phenomenon. The empirical results suggest that charisma has positive effect on IPOs’ performance in initial period; however, such effect turns to negative in the following terms. The difference fairly addresses the description of investors’ irrational behavior.

Keywords: Subscription, Initial public offerings (IPOs), Charisma, Irrational behavior.

Citation

Chao-Shi Wang (2010), "The Charisma Initial Public Offerings and Investors’ Irra- tional Behavior" , 29 (1), Management Review, 103-106.