Joseph J. Henry

Associate Teaching Professor, Finance Group
D'Amore-McKim School of Business at Northeastern University
Email: jo.henry@northeastern.edu

Bio

Joseph J. Henry joined the Finance group at Northeastern University's D'Amore-McKim School of Business in fall 2023. Previously, he was an Assistant Professor of Finance at Rowan University.
Joe enjoys teaching corporate finance classes at the undergraduate and graduate levels, and his current research interests include initial public offerings (IPOs) and shareholder payout policy.
Joe earned his Ph.D. in Finance at The Pennsylvania State University. He is also an alumnus of West Virginia University (M.S. Finance) and the University of California, Irvine (B.A. Business Economics). Before starting his graduate education, he worked at a boutique investment bank in the areas of accounting and regulatory compliance.
Outside of finance, Joe enjoys playing beach volleyball. While he appreciates the majesty of Fenway Park, Joe has been a fan of the Los Angeles Dodgers since he wore his first cap and jersey at just 9 weeks old. Regrettably, his wife is a Yankee fan.

Recent Working Papers

How much money is really left on the table? Reassessing the measurement of IPO underpricing

with Terry O'Brien
IPO issuers are thought to collectively leave billions of dollars "on the table" by underpricing shares relative to the initial trading price. However, this comparison overlooks an important factor: share quantity. The initial market price reflects trading of only about 10% of IPO shares, while issuers need to sell 100% of shares at once. Because investors have different valuations, the price that clears a small quantity exaggerates the feasible price for the full IPO.
Consider concert tickets as an analogy, and imagine all seats have the same quality. If only a small fraction of seats were available, then the most enthusiastic concertgoers ("superfans") would bid up the price. But to sell every seat in the venue simultaneously, you would need to reduce the price to attract a broader audience. The same logic applies to IPOs: you can sell a small number of IPO shares for a higher per-share price than you can sell a large number of IPO shares.
We assess the extent of the mismeasurement by introducing a new measure of IPO underpricing that incorporates both share prices and their associated quantities. Using data from 2,937 IPOs from 1993-2023, our evidence suggests that IPOs are underpriced by substantially less than is commonly believed, perhaps up to 40% less. We conclude that much of what appears to be money left on the table actually reflects the natural price difference between selling small versus large quantities of shares.
Related note: Why would an issuer underprice its shares in an IPO?


Retail IPO Access: High Hopes, Low Returns

with David Gempesaw, Kevin Pisciotta, and Han Xiao
We conduct the first comprehensive analysis of Retail IPO Access programs that allocate IPO shares to retail investors at the same price as institutional investors. Retail IPO stocks underperform contemporaneous IPOs by about 20 percentage points in the first year. We identify two key factors contributing to this underperformance. First, the earnings-to-offer price ratio for Retail IPOs is lower, suggesting adverse selection of aggressively priced IPOs. Second, Retail IPOs experience higher pre-IPO Google search activity and greater post-IPO fractional trade volume, indicating attention-driven retail trading. While adjusting for adverse selection narrows the performance gap, it becomes statistically insignificant when accounting for retail trading. Our findings suggest both adverse selection and attention-driven trading contribute to the underperformance, raising concerns about the benefits of Retail Access programs for retail investors and whether these programs fully disclose associated risks.


Weathering the Blow of a Disrupted Roadshow

with Matt Gustafson, Emily Kim, and Kevin Pisciotta
Exploiting weather-induced shocks to IPO roadshow interactions, we provide evidence that roadshow disruptions not only negatively affect investor participation, but also reduce ownership breadth and equity prices, both in the IPO period and during the subsequent year. These effects are strongest for issuers with low institutional backing and generate a multi-year path dependency whereby roadshow disruptions lead to less liquidity, equity financing, and capital expenditures. These long-run benefits to IPO roadshow participation highlight a new and important channel through which IPO issuers benefit from roadshows when transitioning to public ownership.



Additional information about my ongoing and published research is available on my personal website.