Seasonal Affective Disorder and IPO Underpricing: Updated Evidence

Keef, Stephen P.; O'Connor Keefe, Michael; Khaled, Mohammed

doi:10.2139/ssrn.2343930

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Seasonal Affective Disorder and IPO Underpricing: Updated Evidence

Journal of Neuroscience, Psychology, and Economics, 8, 2(2015), pp. 78–99.

43 Pages Posted: 24 Oct 2013 Last revised: 28 Jun 2015

See all articles by Stephen P. Keef

Stephen P. Keef

Victoria University of Wellington - School of Accounting and Commercial Law

Mohammed Khaled

Victoria University of Wellington - School of Economics & Finance

Date Written: April 10, 2015

Abstract

Using several proxies for seasonal affective disorder (SAD), we find that SAD negatively affects IPO first trading day return (underpricing) during the 1981-1989 and 1999-2000 periods, but not during the 1990-1998 and 2001-2007 periods. During those periods when SAD affects IPO underpricing, firm exposure mitigates the negative effect of SAD. In addition, over the years 1981-2000, we find a negative effect of SAD on the offer price revision of the IPO during bookbuilding, which suggests pre-market investors adjust for SAD effects during the bookbuilding process.

Keywords: Seasonal Affective Disorder, Seasons, Mood, IPO, Underpricing

JEL Classification: G10, G11, G12

Suggested Citation: Suggested Citation

Keef, Stephen and O'Connor Keefe, Michael and Khaled, Mohammed, Seasonal Affective Disorder and IPO Underpricing: Updated Evidence (April 10, 2015). Journal of Neuroscience, Psychology, and Economics, 8, 2(2015), pp. 78–99., Available at SSRN: https://ssrn.com/abstract=2343930 or http://dx.doi.org/10.2139/ssrn.2343930