Retail investor attention and IPO valuation

Hugh M.J. Colaco, Amedeo de Cesari, Shantaram P. Hegde

Research output: Contribution to journalArticlepeer-review


Given restrictions placed on communication with prospective investors, retail investor attention can help firms/underwriters with the task of initially valuing an IPO. Using Google search volume to proxy for retail investor attention, we find that the presence of and an increase in retail attention following initial filing but prior to initial pricing are positively related to initial valuations. Our results are robust to alternative matching methods to identify our matched sample of non-IPO firms and to including several controls for institutional demand. We conclude that retail investor attention plays a critical role in the early stages of IPO valuation.
Original languageEnglish
Pages (from-to)691-727
JournalEuropean Financial Management
Issue number4
Early online date25 Apr 2017
Publication statusPublished - 1 Sept 2017

Bibliographical note

© 2017 John Wiley & Sons, Ltd.


  • initial public offering
  • equity valuation
  • retail investor
  • investor attention


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