The media coverage and its influence onthe share price in an Initial Public Offering

Abstract

The role of mass media has during the past decades become more and more influential and with an increasing range of media channels the possibility to supply the population with news is easier than ever. Over the years media effects on individuals’ perceptions has frequently been discussed and increased media coverage has contributed to an increased interest from the general public regarding the financial markets and institutions. The focus of this paper is to examine a potential relationship between the amount of media coverage and the share price movements in an IPO at the first day of trading. According to the results media demonstrates a non-existent effect on the share price, which implies that mass media fail to manipulate the accurate value of stock.