IDEAS home Printed from
   My bibliography  Save this paper

Initial returns: underpricing or overvaluation ? Evidence from easdaq and euronm


  • Sophie Manigart
  • Wouter De Maeseneire

    (Vlerick Leuven Gent Management School)


This paper investigates initial returns of Easdaq and EuroNM IPOs and explains part of these returns. Average first day return of 300 IPOs introduced before October 1, 1999, is 36.01 %. The most significant explanatory variable is the mean return of previous IPOs, indicating that high initial returns are caused by too high first trading prices due to investor overreaction and positive market sentiment. Riskier IPOs present substantially higher initial returns. Venture capitalists are not able to significantly reduce initial returns, nor does size of the IPO influence initial returns. Our results indicate that high initial returns are caused by underpricing as well as overvaluation.

Suggested Citation

  • Sophie Manigart & Wouter De Maeseneire, 2003. "Initial returns: underpricing or overvaluation ? Evidence from easdaq and euronm," Vlerick Leuven Gent Management School Working Paper Series 2003-11, Vlerick Leuven Gent Management School.
  • Handle: RePEc:vlg:vlgwps:2003-11

    Download full text from publisher

    File URL:
    Download Restriction: no

    More about this item


    underpricing; investor sentiment; IPOs; initial returns;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vlg:vlgwps:2003-11. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Isabelle Vandenbroere (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.