Media sentiment and IPO underpricing: evidence from China

Lyu, Yuhuang 2026. Media sentiment and IPO underpricing: evidence from China. Journal of Media Economics 10.1080/08997764.2026.2664436

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Abstract

This study investigates the impact of stage-specific media sentiment on IPO underpricing in China’s A-share market during the transitional period of registration-based reform. Using computer-assisted content analysis of 5,988 news articles covering 239 IPOs in 2022, we identify pronounced temporal dynamics in financial media coverage. Media attention peaks before listing, while tone shifts from predominantly negative pre-IPO to markedly positive on the IPO day, before moderating post-IPO. Empirical results show that pre-IPO sentiment significantly predicts first-day returns: more negative coverage is associated with greater underpricing, whereas positive sentiment corresponds to lower initial returns. Sentiment reversal from the pre-IPO stage to the listing day is also positively related to first-day returns, suggesting that short-term expectation revisions may contribute to underpricing. By contrast, media attention exerts only limited and firm-size-contingent effects. These findings are consistent with ex-ante uncertainty and prospect theory, suggesting that pessimistic pre-IPO framing may elevate perceived uncertainty and lead to more conservative offer pricing in a retail-dominated market. While based on a transitional regulatory year, causal interpretation remains subject to potential endogeneity. Future research using multi-year data and stronger identification strategies could further clarify the causal and long-term valuation effects.

Item Type:	Article
Date Type:	Published Online
Status:	In Press
Schools:	Schools > Journalism, Media and Culture
Publisher:	Taylor & Francis (Routledge): SSH Titles
ISSN:	0899-7764
Date of First Compliant Deposit:	6 May 2026
Last Modified:	06 May 2026 10:00
URI:	https://orca.cardiff.ac.uk/id/eprint/186815

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