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A Note on Brazilian IPOs Performance in the Long Run

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  • Avelino, Ricardo

Abstract

This paper examines the long-run performance of Brazilian IPOs based on a sample of 143 firms that went public between 2004 and 2013. There is no evidence that IPOs underperform the market in the 60 months after going public. An investor would have to put 12.6% more money in an investment that mimics the index than in the IPOs to achieve the same terminal wealth level five years later. IPOs with the highest initial returns have the worst aftermarket performance and there is mixed evidence that larger IPOs underperform the smaller IPOs in the five years subsequent to the offerings.

Suggested Citation

  • Avelino, Ricardo, 2020. "A Note on Brazilian IPOs Performance in the Long Run," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 74(4), December.
    • Handle: RePEc:fgv:epgrbe:v:74:y:2020:i:4:a:79791
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    1. Reena Aggarwal & Ricardo Leal & Leonardo Hernandez, 1993. "The Aftermarket Performance of Initial Public Offerings in Latin America," Financial Management, Financial Management Association, vol. 22(1), Spring.
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    3. Loughran, Tim, 1993. "NYSE vs NASDAQ returns : Market microstructure or the poor performance of initial public offerings?," Journal of Financial Economics, Elsevier, vol. 33(2), pages 241-260, April.
    4. Loughran, Tim & Ritter, Jay R, 1995. "The New Issues Puzzle," Journal of Finance, American Finance Association, vol. 50(1), pages 23-51, March.
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