Prospectus Content as Predictor of IPO Outcome: A topic model approach
It is beneficial for both investors and companies to avoid the detrimental consequences of overpricing during an initial public offering (IPO). Prospectuses are an important source of information for potential investors. Through Latent Dirichlet Allocation (LDA) we extract topics from the summary section of prospectuses S-1 for companies holding an IPO in the U.S. in 2019-2020. We represent the un