The long-run performance of initial public offerings

Article Abstract:

The underpricing of initial public offerings (IPOs) that has been widely documented appears to be a short-run phenomenon. Issuing firms during 1975-84 substantially underperformed a sample of matching firms from the closing price on the first day of public trading to their three-year anniversaries. There is substantial variation in the underperformance year-to-year and across industries, with companies that went public in high-volume years faring the worst. The patterns are consistent with an IPO market in which (1) investors are periodically overoptimistic about the earnings potential of young growth companies, and (2) firms take advantage of these "windows of opportunity." (Reprinted by permission of the publisher.)

Evaluation, Economic aspects, Finance, Stocks, Corporations, Corporate finance

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The seven percent solution

Article Abstract:

The authors examine trends in the spread points assigned to initial public offerings. Topics include underwriting, profitability, and hybrid securities.

Statistical Data Included, Research, Financial services industry, Financial services, Services, Investment banks, Economies of scale

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The quiet period goes out with a bang

Article Abstract:

An analysis of the economic aspects of the information provisions made by firms on the 26th day after an initial public offering is provided.

Company public offering

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