Sophisticated investors gain unfair advantage in IPO market, exploiting information disparity.
The article explores how some investors have more information than others in the stock market, especially when it comes to new companies going public. Sophisticated investors, who know more about the companies, can make better decisions and potentially profit more. The researchers looked at data from Indian companies that recently went public to see if this information advantage exists. They found that sophisticated investors do indeed have private information that helps them trade better in the stock market after the initial public offering.