| dc.description.abstract | This thesis collects financial news articles related to firms one month before IPO and explore the impact of financial media sentiment on initial public offerings in the following aspects: IPO initial return, proxy variable of investor sentiment before IPO, hot issue and initial public offerings. In this thesis, we analyze the media sentiment behind news articles and apply text processing skill to construct the measure of media sentiment, including net news sentiment, the proportion of positive news sentiment and negative news sentiment, based on the news collected from United Daily News, Economic Daily News, Commercial Times and China Times. Besides, this thesis also adjusts the influence of negation words.
Bases on over 5000 news articles from 474 IPOs, the empirical analysis in this thesis provides the following results. (1) Net news sentiment and positive news sentiment drive up the IPO initial return significantly, indicating that positive media words toward IPOs indeed increase IPO initial stock prices. (2) Investors are more willing to apply for the public subscription to the IPOs with higher net news sentiment. On the other hand, higher negative news sentiment from media before IPO significantly decreases investors’ subscription willingness for IPOs. (3) Compared to the entire sample, net news sentiment or individual positive and negative news sentiment do not have a larger impact in the hot issue market. (4) Firms with higher net news sentiment before IPO tend to exhibit the price reversal in one month and lower six-month buy and hold returns. | en_US |