| Summary: | The objective of this research is to examine these following variables: age
of the firm, company size, offering size and underwriter reputation on initial
return share at initial public offering. During initial public offering, the share price
tends to be lower at initial public offerings compared to when it is commercialized
in secondary market. Such phenomenon is called underpricing.
There are 123 IPO companies listed on the Indonesia Stock Exchange
during 2005-2011. Sample is taken by using purposive sampling with criteria as
underpriced stocks. Data are analyzed using multiple regressions to test the
relation between initial return and the age of the firm, company size, offering size,
and underwriter reputation.
According to result of the study, regression analysis shows that
underwriter reputation is found to be negatively related to the level of
underpricing. However for the other variables was found to have no significant
influence on the level of underpricing of IPOs in the Indonesia Stock Exchange.
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