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The Long-Run Negative Drift of Post-listing Stock Returns

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  • Dharan, Bala G
  • Ikenberry, David L
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    Abstract

    After firms move trading in their stock to the American or New York Stock Exchanges, stock returns are generally poor. Although many listing firms issue equity around the time of listing, postlisting performance is not entirely explained by the equity issuance puzzle. Similar to the conclusions regarding other long-run phenomena, poor postlisting performance appears related to managers timing their application for listing. Managers of smaller firms, where initial listing requirements may be more binding, tend to apply for listing before a decline in performance. Poor postlisting performance is not observed in larger firms. Copyright 1995 by American Finance Association.

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    Bibliographic Info

    Article provided by American Finance Association in its journal Journal of Finance.

    Volume (Year): 50 (1995)
    Issue (Month): 5 (December)
    Pages: 1547-74

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    Handle: RePEc:bla:jfinan:v:50:y:1995:i:5:p:1547-74

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    Cited by:
    1. Alon Brav & Christopher Geczy & Paul A. Gompers, . "Is the Abnormal Return Following Equity Issuances Anomalous?," Rodney L. White Center for Financial Research Working Papers 02-99, Wharton School Rodney L. White Center for Financial Research.
    2. Eugene F. Fama & Kenneth R. French, . "Newly Listed Firms: Fundamentals, Survival Rates, and Returns," CRSP working papers 530, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
    3. Owen A. Lamont, 2002. "Evaluating Value Weighting: Corporate Events and Market Timing," NBER Working Papers 9049, National Bureau of Economic Research, Inc.
    4. Stephen R. Foerster & G. Andrew Karolyi, . "The Effects of Market Segmentation and Illiquidity on Asset Prices: Evidence from Foreign Stocks Listing in the US," Research in Financial Economics 9606, Ohio State University.
    5. Luo, Yongli & Fang, Fang & Esqueda, Omar A., 2012. "The overseas listing puzzle: Post-IPO performance of Chinese stocks and ADRs in the U.S. market," Journal of Multinational Financial Management, Elsevier, vol. 22(5), pages 193-211.
    6. H. Baker & Gary Powell & Daniel Weaver, 1998. "The effect of NYSE listing on a firm’s media visibility," Journal of Economics and Finance, Springer, vol. 22(1), pages 19-28, March.
    7. Michael R. King & Dan Segal, 2006. "The Long-Term Effects of Cross-Listing Investor Recognition, and Ownership Structure on Valuation," Working Papers 06-44, Bank of Canada.
    8. Franck Bancel, 2007. "La cotation des titres des entreprises européennes aux États-Unis : une approche critique," Revue d'Économie Financière, Programme National Persée, vol. 89(3), pages 143-162.
    9. BAKO Elena Dana & SECHEL Ioana Cristina, 2013. "Technical And Fundamental Anomalies. Paradoxes Of Modern Stock Exchange Markets," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 37-43, July.
    10. Rene M. Stulz, 1999. "Globalization of Equity Markets and the Cost of Capital," NBER Working Papers 7021, National Bureau of Economic Research, Inc.
    11. Yaseen Alhaj-Yaseen, 2013. "Cross-listing in the home market after going public in the U.S," Journal of Economics and Finance, Springer, vol. 37(2), pages 274-292, April.

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