The aim of this study is to answer an important but unanswered question about manipulation of earnings before initial public offerings. Several studies have examined earnings management in IPOs. In previous studies, researchers did not examine that firms manipulating income figures have seen little underpricing or confronted with larger underpricing despite aggressive earning management. We used somewhat new proxy of earnings management to test whether approximately high degree of earnings manipulation before IPO cause larger underpricing or not. This assertion is based on asymmetric information theory in underpricing literature that claims firms with approximately high degree of earnings manipulation have increased ex-ante uncertainty. As we know from research literature, increase in ex-ante uncertainty leads to steeper price discounts. However this is despite the prevailing hypothesis that firms going public can fool the market by offering higher prices for their shares. We did not find any significant relationship between earnings management and underpricing and thus our finding is consistent with the hypothesis that suggests high degree of earnings manipulation before going public leads to little underpricing.