Abstract
This paper explores the relation between the sentiment of the media and IPOs underpricing which means whether the media were responsible for the phenomenal rise and fall in the market value of IPOs shares from 2010 to 2014. We focus on the effect of pre-IPOs media on the first day’s return and we use sentiment analysis to calculate the media sentiment and use the sentimental words to classify the news. We found that the sentiment of media is significantly related to initial return. This paper also indicates significantly results that initial return is related to market return than sentiment of media in non-electronics industry. Furthermore, as our expected, the number of positive (negative) news has a positive (negative) influence on the initial return in the electronics industry.
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Notes
- 1.
- 2.
Knowledge Management Winner, http://kmw.chinatimes.com/.
- 3.
Biotechnology & medical care, optoelectronic, electronic parts & components, semiconductor, communications & Internet, electric machinery, electronics & peripheral equipment, information service, tourism, other electronic, trading and consumers’ goods, shipping & transportation, chemical, cultural & creative, textiles, building material & construction, plastics, electrical & cable, iron & steel, automobile, glass & ceramics, foods, electronic products distribution, other.
- 4.
News that is considered to have a positive (negative) impact on IPO firms. News is considered to have a trivial impact is classified as neutral news.
- 5.
Electronics: 106 and Non-electronics: 133.
- 6.
TW1: pre-IPO period, TW2: one month prior to the issue day.
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Acknowledgement
This research is supported by NSC 102-2627-E-004 -001, MOST 103-2627-E-004 -001, MOST 104-2627-E-004-001.
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Seng, JL., Yang, PH., Yang, HF. (2016). IPO and Financial News. In: Nguyen, N.T., Trawiński, B., Fujita, H., Hong, TP. (eds) Intelligent Information and Database Systems. ACIIDS 2016. Lecture Notes in Computer Science(), vol 9622. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-49390-8_34
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