Atkins, Allen B. and Pince, Stephen (2002) The IPO market: Do investors and analysts who follow IPOs learn? Working paper series--02-26. Working Paper. NAU W.A. Franke College of Business.
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Abstract
5370 IPOs are examined between 1975 and 1996 for evidence of trends in investor and analyst behavior over time. Following Ritter (1991) and Loughran and Ritter (1995), wealth relatives are calculated and aftermarket performance is examined each year over the sample period. IPOs followed by analysts, and reported on IBES within one year of the offer date, have consistently outperformed IPOs not followed by analysts. Historically, however, all firms typically underperform the market in years two and three following the IPO. This underperformance appears to change in the years following 1990 when IPOs followed by analysts outperform an industry control in each of the first three years following the IPO. This suggests analysts may be learning over time. Investors, however, do not appear to be learning. In spite of years of evidence showing that the returns of IPOs underperform the market in the years following the offering, no change in investor behavior is shown in recent years.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Publisher’s Statement: | Copyright, where appropriate, is held by the author. |
| ID number or DOI: | 02-26 |
| Keywords: | Working paper, business education, curriculum integration, student success |
| Subjects: | H Social Sciences > HG Finance |
| NAU Depositing Author Academic Status: | Faculty/Staff |
| Department/Unit: | The W.A. Franke College of Business |
| Date Deposited: | 07 Jan 2016 23:52 |
| URI: | http://openknowledge.nau.edu/id/eprint/1626 |
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