Management Tone,Media Sentiment And IPO Underpricing

As an important way of direct financing,Initial Public Offering(IPO)provides low-cost capital sources for many high-quality enterprises,and its pricing efficiency and rationality are of great significance to the reform,innovation and steady operation of China’s capital market.At the same time,the phenomenon of IPO underpricing in the domestic capital market is widespread,which challenges the efficiency of IPO pricing.In this context,the discussion on the attribution of IPO underpricing phenomenon continues,and market sentiment is one of the important factors to be concerned.Thanks to the rapid development of computer language,the application of text-based sentiment analysis in the financial field has broadened the data source for measuring sentiment.Variables such as management tone,media sentiment and investor sentiment are widely used in the research on asset prices.Considering that information disclosure and dissemination is an important process before IPO,this thesis focuses on the emotional tendency of management and media in text information,explores how the two affect IPO underpricing,and provides a basis for relevant departments to supervise the information disclosure of listed companies.Firstly,based on text data from prospectuses and media reports of Domestic A-share listed companies,this thesis extracts variables used to measure management tone and media sentiment.Secondly,this thesis examines the effect of management tone on IPO underpricing on the basis of existing literature.Thirdly,this thesis focuses on the establishment of mediating effect model,analyzes the media sentiment as a mediating variable on the impact of IPO underpricing mechanism,clear the relationship between the three variables.Then,we explore the heterogeneity of the effect of management tone on IPO underpricing under different underwriter reputation and different stock issuing systems through grouping regression.Finally,two moderating variables,property rights and media properties,are introduced to analyze the heterogeneity of the relationship between media sentiment and IPO underpricing,and further discuss the empirical results.The conclusions based on the above work are as follows:First,the net tone of management in the prospectus is generally positive,and it is significantly positively correlated with the degree of IPO underpricing.Second,management tone has a certain guiding effect on media sentiment which shows that management’s net positive tone is positively correlated with media net positive sentiment.Third,media sentiment plays a partial intermediary role in the impact of management tone on IPO underpricing.Fourth,underwriter reputation and issuance system play a moderating role in the effect of management tone on IPO underpricing,while high underwriter reputation and registration system make the effect of management tone on IPO underpricing no longer significant.Fifthly,the nature of corporate property rights and the nature of media play a moderating role in the impact of media sentiment on IPO underpricing.Among state-owned enterprises and enterprises with a large number of official media reports,media sentiment has a more significant impact on IPO underpricing.Based on the research conclusions,this thesis puts forward the following policy recommendations:First,strengthen the quality requirements of non-financial information disclosure of enterprises,deepen the reform of registration system,and enrich the channels of information disclosure.Second,guide media and enterprises to establish a good media-enterprise relationship,strengthen the restraint and supervision of official media.Third,investors are called on to identify key information disclosure and improve information discrimination.Remind investors to avoid blindly follow investment,reduce irrational investment behavior.