The Really Long-Run Performance of Initial Public Offerings: The Pre-NASDAQ Evidence

No 8505, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Financial economists in recent years have closely examined and intensely debated the performance of initial public offerings using data after the formation of NASDAQ. The paper seeks to shed light on this controversy by undertaking a large, out-of-sample study: we examine the performance for up to five years after listing of nearly 3,661 initial public offerings in the United States from 1935 to 1972. The sample displays some evidence of underperformance when event-time buy-and-hold abnormal returns are used. The underperformance disappears, however, when cumulative abnormal returns are utilized. A calendar-time analysis also shows that over the entire sample period i.e., from 1935 to 1976 IPOs return as much as the market. Finally, the intercepts in CAPM and Fama-French three-factor regressions are insignificantly different from zero suggesting no abnormal performance.

JEL-codes: G14 G24 (search for similar items in EconPapers)
Date: 2001-10
New Economics Papers: this item is included in nep-fmk
Note: CF
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Citations: View citations in EconPapers (3)

Published as Journal of Finance, 58 (August 2003) 1355-1392.

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Journal Article: The Really Long‐Run Performance of Initial Public Offerings: The Pre‐Nasdaq Evidence (2003)
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