The Really Long-Run Performance of Initial Public Offerings: The Pre-Nasdaq Evidence
Financial economists have intensely debated the performance of IPOs using data after the formation of Nasdaq. This paper sheds light on this controversy by undertaking a large, out-of-sample study: We examine the performance for five years after listing of 3,661 U.S. IPOs from 1935 to 1972. The sample displays some underperformance when event-time buy-and-hold abnormal returns are used. The underperformance disappears, however, when cumulative abnormal returns are utilized. A calendar-time analysis shows that over the entire period, IPOs return as much as the market. The intercepts in CAPM and Fama-French regressions are insignificantly different from zero, suggesting no abnormal performance. Copyright (c) 2003 by the American Finance Association.
Year of publication: |
2003
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Authors: | Gompers, Paul A. ; Lerner, Josh |
Published in: |
Journal of Finance. - American Finance Association - AFA, ISSN 1540-6261. - Vol. 58.2003, 4, p. 1355-1392
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Publisher: |
American Finance Association - AFA |
Saved in:
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