Signaling and the Valuation of Unseasoned New Issues: A Comment



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    • Assistant Professor of Finance, Wharton School, University of Pennsylvania. This comment is based on Essay 2 of my Ph.D. dissertation at the University of Chicago. I am grateful to my committee, Merton Miller, Edward Prescott, and Lester Telser for their advice. Comments received from Harry DeAngelo, Wayne Ferson, Mark Flannery, Melanie Lau, Hans Stoll, and an anonymous referee have also been beneficial. The 1960s data have been generously provided by David Downes, who has also spent substantial time discussing the topic. An earlier version of this comment was circulated under the title “Insider Holdings and the Pricing of Initial Public Offerings.”