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With almost cyclical regularity popular business periodicals publish articles with titles such as Hot Issues, New Issues Stock Boom Nears, and New Issues Become the Rage Again. Recently, there has been a resurgence of these articles as numerous high-technology and energy related firms approach the equity market. These articles typically highlight the nature of these stocks, their regulation, and the phenomenal price appreciation that some of them experience. In addition, these articles tend to incite speculative fever in the small investor, who finds that the lower priced new issues allow him/her to participate in the latest best game in town.
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Neuberger et al. (1983) studied this question.
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