Abstract: Taking 403 companies listed on the SME’s board in Shenzhen Stock Market during 2009-2012 as the research samples, this paper examines the relationship between media reports and IPO underpricing from the three dimensions of media coverage, media supervision and negative public opinion revealed by media. The empirical results show that the more media reports, the heavier the media coverage, and the higher the corporate IPO underpricing. Due to the number of negative media coverage is small, although there exists a negative correlation between media monitoring and IPO underpricing, it is not significant. However, when taking the ratio of the number of negative reports to the total number of reports as a proxy variable of media negative public opinion, it can be found that the media negative public opinion can significantly reduce the IPO underpricing rate and effectively inhibit higher IPO underpricing.

Key words: media coverage; media supervision; negative public opinion of media; IPO underpricing of SMEs