IPO Prospectus Information and Subsequent Performance
AbstractInitial public offerings underperform in the long run; however, there is very little evidence on their cross-sectional variation. Using a random sample of IPOs from 1987 through 1991 and gathering their prospectus data, we show that financial and operating characteristics as well as offering characteristics have a limited relation with the one-year stock returns. We also find that firms that subsequently reissue equity or merge outperform their matched-firm benchmarks over three years. Underperformance is most severe for the smaller and younger firms. We find that prospectus information is more useful to predict survival/failure compared to subsequent equity offerings or acquisitions. Copyright 2003 by the Eastern Finance Association.
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Bibliographic InfoArticle provided by Eastern Finance Association in its journal The Financial Review.
Volume (Year): 38 (2003)
Issue (Month): 3 (08)
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- Cécile Carpentier & Jean-Marc Suret, 2009. "The Survival and Success of Canadian Penny Stock IPOs," CIRANO Working Papers 2007s-28, CIRANO.
- Cécile Carpentier & Jean-Marc Suret, 2011. "The survival and success of Canadian penny stock IPOs," Small Business Economics, Springer, vol. 36(1), pages 101-121, January.
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- Hatem Mansali & Florence Labégorre, 2010. "Les performances économiques et boursières à long terme des sociétés introduites en bourse:le cas du marché français (1990-2003)," Revue Finance Contrôle Stratégie, revues.org, vol. 13(2), pages 67-106., June.
- Sun, Yue & Uchida, Konari & Matsumoto, Mamoru, 2013. "The dark side of independent venture capitalists: Evidence from Japan," Pacific-Basin Finance Journal, Elsevier, vol. 24(C), pages 279-300.
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