Reforming the Bookbuilding Process for IPOs

Ravi Jagannathan, Ann E Sherman

Research output: Contribution to journalArticlepeer-review


The controversy over IPOs has raised questions about whether retail investors are being unfairly denied access to shares in IPOs and whether the new Internet auction methods might provide a fairer and more efficient way to allocate shares. This article argues that much of the popular concern may be misdirected. By and large, bookbuilding is well designed to accomplish price discovery in a cost-effective way. And standard auctions, which have been all but abandoned in a number of countries, have generally proved disappointing for equity IPOs (although they have been successful for bond offerings). The authors propose a “hybrid” form of securities issuance that would retain the advantages of bookbuilding while incorporating a public offer “tranche” for retail investors and other measures designed to increase transparency.
Original languageEnglish
Pages (from-to)67-72
JournalJournal of Applied Corporate Finance
StatePublished - 2005


Dive into the research topics of 'Reforming the Bookbuilding Process for IPOs'. Together they form a unique fingerprint.

Cite this