Offering prospectuses, competitive strategies, and the pricing of initial public offering

We explore the relationship between the strategic information in an IPO prospectus and the firm\u27s post-IPO pricing. Based upon a content analysis of 39 business to consumer (B2C) and 25 business to business (B2B) “dot.com” initial public offerings, several conclusions were reached. First, e-commerce firms showed dramatic short‐term underpricing and long-term underperformance. Second, we found strong support that the strategic information contained in the firm\u27s prospectus affects post-IPO pricing, and is incorporated in both the initial day and long-term market-adjusted stock prices. And third, we found that the reputation of the firm\u27s underwriter had little correlation with a firm\u27s post-IPO pricing success