ANALYSIS OF FACTORS THAT INFLUENCEUNDERPRICING IN TNNONNSIA STOCK EXCHANGEAFTER INITIAL PUBLIC OFFERING:EMPIRICAL STUDY OF GO PUBLICCOMPANIES IN 2OO5 - 2OII

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.