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The Post-Issue Operating Performance of IPO Firms


  • Jain, Bharat A
  • Kini, Omesh


This article investigates the change in operating performance of firms as they make the transition from private to public ownership. A significant decline in operating performance subsequent to the initial public offering (IPO) is found. Additionally, there is a significant positive relation between post-IPO operating performance and equity retention by the original entrepreneurs but no relation between post-IPO operating performance and the level of initial underpricing. Postissue declines in the market-to-book ratio, price/earnings ratio, and earnings per share are also documented. Copyright 1994 by American Finance Association.

Suggested Citation

  • Jain, Bharat A & Kini, Omesh, 1994. "The Post-Issue Operating Performance of IPO Firms," Journal of Finance, American Finance Association, vol. 49(5), pages 1699-1726, December.
  • Handle: RePEc:bla:jfinan:v:49:y:1994:i:5:p:1699-1726

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