TY  - JOUR
AU  - Gale,Ian
AU  - Stiglitz,Joseph
TI  - The Informational Content of Initial Public Offerings
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3259
PY  - 1990
Y2  - February 1990
UR  - http://www.nber.org/papers/w3259
L1  - http://www.nber.org/papers/w3259.pdf
N1  - Author contact info:
Joseph E. Stiglitz
Uris Hall, Columbia University
3022 Broadway, Room 814
New York, NY  10027
Tel: 212/854-0671
Fax: 212/662-8474
E-Mail: jes322@columbia.edu
AB  - The ability of capital markets to distinguish firms of different value by the size of their initial equity offerings is attenuated when insiders can sell equity more than once. A model is developed in which there is price risk from holding equity  between periods. When the uncertainty is small. there must be pooling in the first period. When uncertainty is large. the pooling equilibria dominate the separating equilibrium.
ER  -