In this research, a familiar phenomenon after issuing of new Iranian companies, named overreaction day has been investigated. The formation of consecutive buying and selling queues in the secondary market, which are considered to be influenced by the herding behavior of investors, is very typical in Iranian initial public offerings. This is the second study in Iran that examines overreaction in initial Offering and is also, the first study that examines the effect of the rationing mechanism and resemblance of ideal gas law to explain market emotions after Iranian IPO. Investigations show that from the sample of 203 selected companies from 1385 to 1400, 170 companies, about 84%, have experienced overreaction queues for an average of 25 days after offerings. Despite the 84% share, as well as a wide range of research have conducted during last 20 years, there are still questions, how to analyze the formation of consecutive queues after the offering? Why has this behavior been investigated less so far? What theories can drive this type of behavior? Is this phenomenon a kind of anomaly and causes distance from intrinsic values? For answering some of mentioned question, findings confirmed the significant relationship between Hot market, support with stock valuation, company age, IPO size, and company size variables with overreaction days, and by examining the relationship of these variables, a part of the theory of pressure caused by rationing, as same as what is observed in the complete gas theory, was confirmed.
ziaghasemi, M., Pourheidari, O., & khodamipour, A. (2024). Investigation of overreaction in Iranian IPO of Tehran stock market, evidence of rationing effect. Applied Research in Financial Reporting, 12(2), 39-71.
MLA
Milad ziaghasemi; Omid Pourheidari; Ahmad khodamipour. "Investigation of overreaction in Iranian IPO of Tehran stock market, evidence of rationing effect". Applied Research in Financial Reporting, 12, 2, 2024, 39-71.
HARVARD
ziaghasemi, M., Pourheidari, O., khodamipour, A. (2024). 'Investigation of overreaction in Iranian IPO of Tehran stock market, evidence of rationing effect', Applied Research in Financial Reporting, 12(2), pp. 39-71.
VANCOUVER
ziaghasemi, M., Pourheidari, O., khodamipour, A. Investigation of overreaction in Iranian IPO of Tehran stock market, evidence of rationing effect. Applied Research in Financial Reporting, 2024; 12(2): 39-71.
