In this chapter we examine the determinants of the long-run stock price performance of Initial Public Offerings (IPOs) on Europe's new stock markets. We report that the average company that went public on these markets has been a very poor long-term investment. We find that the stock price performance during a three-year window is inversely related to first-day returns. We also find that the long-term underperformance of IPO firms begins after the lock-up agreement has expired and insiders start trading in the firm's shares. These findings are consistent with the divergence of opinion hypothesis of Miller (1977). © 2004 Elsevier Ltd. All rights reserved.
THE LONG-TERM PERFORMANCE OF INITIAL PUBLIC OFFERINGS ON EUROPE'S NEW STOCK MARKETS
GIUDICI, GIANCARLO;
2004-01-01
Abstract
In this chapter we examine the determinants of the long-run stock price performance of Initial Public Offerings (IPOs) on Europe's new stock markets. We report that the average company that went public on these markets has been a very poor long-term investment. We find that the stock price performance during a three-year window is inversely related to first-day returns. We also find that the long-term underperformance of IPO firms begins after the lock-up agreement has expired and insiders start trading in the firm's shares. These findings are consistent with the divergence of opinion hypothesis of Miller (1977). © 2004 Elsevier Ltd. All rights reserved.| File | Dimensione | Formato | |
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