As I said before, the tendency of behavioral approach and investor sentiment is not a new field not again discovered, the investor sentiment was introduced earlier in the 1990’s by Welch who presented the informational cascade theory. But the Behavioral Approach has sparked the academics’ attention, has intrigued more and more researchers and has taken all its impetus in this decade. The studies and investigations are more and more numerous trying to explain the short run IPO anomaly by investor sentiment and behaviour. The research effort is continuing since the behavioral approach seems to be a very promising field to resolve the short run IPO phenomenon that is still a puzzle since the other theories and explanations advanced earlier failed to resolve it.
I begin by presenting the first explanations and the first findings that were observed to explain the short run phenomenon by the investor sentiment.