Abstract
The primary areas of IPO research are briefly reviewed. As a continuing service to researchers, Ritter and Welch provide an updated bibliography of IPO research. As of the end of 2003, there were 364 references listed in the database. The substantial body of research primarily focused on three anomalies: 1. short-run underpricing of IPOs, 2. "hot issue" market phenomenon, and 3. long-run underperformance of IPOs. Ritter and Welch argue that asymmetric information is not the primary driver of many IPO phenomena. Some recent research supports the non-rational phenomenon. A non-rational explanation of the phenomena argues that the greater the unexpected increase in owner wealth that occurs during the IPO process, the less the bargaining effort of the owners. The institution of IPO price support is certainly a potential area for fruitful research. Underwriters use the overallotment-of-shares option as the mechanism for potential price support, the so-called "Green Shoe" option.