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Shows higher first-day returns for high-end IPO pricing, suggesting strategic negotiation implications with underwriters.
Many IPOs are priced at exactly the high-end of the pricing range. Investing in IPOs priced at the high-end leads to first-day returns that are substantially higher than investing in IPOs that are priced just below or above the high-end. We argue that these results are in line with issuing firms settling for positively perceived salient pricing points in negotiations with underwriters.
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Mueller et al. (2026) studied this question.
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