Abstract
This paper investigates the association between retail investors’ online activity and the pricing of initial public offerings (IPOs). We utilize data from Google Trends and StockTwits to analyze price revision for 901 U.S. IPOs, and find that the online search count, social media post count, and post sentiment are positively associated with IPO pricing. One-standard-deviation increases in these variables correspond to price revision increases of 9.02 %, 50.73 %, and 70.22 %, respectively. Additionally, online search plays a more significant role in influencing IPO price revision when social media discussions about a specific IPO exhibit higher sentiment inequality among participants.
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