Lead IPO underwriters attract attention, leading to better stock performance.
Lead underwriters in initial public offerings use their connections in the investment banking network to attract more attention from investors, leading to better outcomes for the companies going public. The more central the underwriter is in the network, the higher the offer price, valuation, initial returns, institutional investor holdings, analyst coverage, stock liquidity, and long-term stock returns. This is achieved by disseminating information about the company and extracting valuable insights from investors.