Media Coverage,Investor Sentiment And IPO Underpricing

IPO Underpricing(IPO Underpricing)is the mystery of finance.When new stock is listing,speculative atmosphere is strong,which seriously disturbs the rapid and sound development of the IPO market,and reduces the efficiency of the stock market.In the Internet era,media is an important source for investors to get information.Specifically for IPO companies,besides some institutional investors,they can learn more about distribution enterprises based on roadshows and research.Other investors acquire information mainly form media.many media have their own opinions of public opinion,which cannot be ignored in changing the perceptual knowledge of the masses and mobilizing the public sentiment.Therefore,the study of media coverage has far-reaching theoretical significance.When analyzing the relationship between media and IPO underpricing,most of the researchers studied the relationship between IPO and underpricing based on the total number of media reports.Some scholars have analyzed the influence of media keynote on IPO underpricing.The micro mechanism that media affects IPO underpricing by IPO is seldom studied.Meanwhile,there is little research on media coverage and underwriter cost in the process of media.Based on this,this paper explores the impact of media on IPO underpricing from the three dimensions of media attention,media supervision,media sentiment;secondly,explore the internal mechanism of media through influencing investors then affect IPO underpricing;and further analyzes the relationship between media reports and underwriter fees in order to explore,in the process of IPO,the underwriter does have a strong incentive to the public through the media to promote the listed companies.The part of empirical study are as follows:(I)Taking the A share listed companies from January I,2016 to June 30,2017 as samples,mining all text news reports from 2014 to June 2017 in Sina News by python.After quantifying text through the python,constructing media coverage index——media attention,media supervision and media sentiment,this paper studies the relationship between media coverage and IPO underpricing rate from three dimensions:Media attention,media supervision and media sentiment.First,with the number total media reports as a proxy variable of media attention,the number of negative media coverage and the proportion to the number of negative reports and the number of total media reports as a proxy variable of media supervision,and the score of negative news as a proxy variable of media sentiment(segment negative news,then use Python to score emotional news based on sentiment dictionary,so as to build media sentiment index.),the paper comprehensively studied the influence of media coverage on IPO underpricing from the above three dimensions.The empirical results show that media coverage has information content,and media supervision can inhibit IPO underpricing rate.Further,with the Turnover as a proxy variable of Investors' sentiment,this paper takes investors' sentiment index and the cross terms into the model to study the path of media coverage on IPO underpricing rate.More over,this paper studies the relationship between media coverage and the fee of underwriters from two dimensions:Media supervision and media sentiment.In the process of IPO,underwriters have a motive to create a good image for the listed companies through the media publicity,thus increasing their income.The main conclusions of this paper are as follows:(1)The two media supervision indicators,the proportion to the number of negative reports and the number of total media reports and the number of media negative reports,have a significant negative impact on the IPO underpricing rate.Besides,the more negative reports of news media,the smaller the impact of investor sentiment on IPO underpricing rate.The media will affect asset prices through influencing investor sentiment.(2)The two media supervision indicators,the proportion to the number of negative reports and the number of total media reports and the number of media negative reports,and media sentiment has a significant negative impact on the underwriter fees.This shows that underwriters have the motivation to publicize and recommend the listed companies through media,guiding or even inciting public investment decision.