Analysis of Factors Which Affect Company Shares Underpricing Level at Initial public offering (IPO) on the Indonesia Stock Exchange Period 2013-2018

International Journal of Economics and Management Studies

© 2020 by SSRG - IJEMS Journal

Volume 7 Issue 8

Year of Publication : 2020

Authors : Ariyanto, Sri Hasnawati, Ernie Hendrawaty

10.14445/23939125/IJEMS-V7I8P110

How to Cite?

Ariyanto, Sri Hasnawati, Ernie Hendrawaty, "Analysis of Factors Which Affect Company Shares Underpricing Level at Initial public offering (IPO) on the Indonesia Stock Exchange Period 2013-2018," SSRG International Journal of Economics and Management Studies, vol. 7,  no. 8, pp. 70-72, 2020. Crossref, https://doi.org/10.14445/23939125/IJEMS-V7I8P110

Abstract:

Alternative funding from an external company is through an inclusion mechanism that is generally done by selling company shares to the public or is often known by going public terms. If the Company has already decided to take Go Public at the beginning, it has to start its initial company share known as Initial Public Offering (IPO). The absence of an observable previous market price to be used as a bid determination makes the initial stock price determination at IPO very difficult. If the price of shares on the primary market (IPO) is lower than the shares price on the secondary market on the first day, then there will be a phenomenon of low prices on the initial offering market, which is referred to as Underpricing. Several factors affect Underpricing, which are Underwriter Reputation, The Age of the Company, The Company Size, and Return on assets.

Keywords:

Underpricing, Underwriter Reputation, The Age of Company, The Company Size, and Return on Asset.

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