Abstract: With the comprehensive implementation of the registration system reform, how the reform of the issuing system and the trading system affects IPO stock pricing has become the focus of attention. Taking the reform of GEM registration system as a quasi-natural experiment, this paper constructs a DID model to explore the impact of investor sentiment on IPO stock pricing. The findings show that, compared with the approved main board market, investors are more enthusiastic to participate in the subscription of IPO stocks of registered GEM, and the investor sentiment can aggravate the underpricing of the registered GEM IPO stocks. Meanwhile, compared with the main board market, the IPO stock of the registered GEM presents more information contents, which proves that the changes of IPO underpricing after the reform of the registration system cannot be explained by information asymmetry. Further analysis shows that the registered GEM IPO stocks exhibit a more significant long-term reversal when investor sentiment drives up short-term stock valuations. Stocks with higher analyst attention, higher optimism, and wider divergent opinions are more affected by the registration system for IPO underpricing. The science and technology innovation board stocks with a more rational investor structure do not show a higher investor sentiment and IPO underpricing, which indicates that investor sentiment would affect the IPO pricing of the GEM. The above conclusion means that in the process of registration system reform, the government, enterprises, and investors not only need to understand the disclosure of relevant information of listed companies, but also need to closely monitor the emotional changes of stock investors, so as to promote the stable development of the capital market and the real economy.

Key words: investor sentiment, IPO underpricing, registration system reform, information asymmetry