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Information Risk and Long-Run Performance of Initial Public Offerings

  • Authors
  • Frank Ecker
Book

Table of contents

About this book

Introduction

There has been an extensive debate in financial economics research on long-term abnormal stock returns following firms’ initial public offerings (IPOs). So far, the discussion has concentrated on long-term underperformance.

Frank Ecker examines the performance of U.S. IPOs from 1980 to 2002. He links positive and negative abnormal returns to the deviation of the realized information risk from the expected information risk. The author shows that abnormal returns are significantly negative during the price adjustment process when information risk has initially been underestimated whereas the returns are significantly positive in cases of information risk overestimation. Based on his findings, he proposes effective measures for a long-term profitable investment strategy in IPOs.

Keywords

Abnormal returns measurement Empirical research IPOs Information risk Performance Public Relations investment strategy

Bibliographic information

  • DOI https://doi.org/10.1007/978-3-8349-8117-2
  • Copyright Information Gabler Verlag | GWV Fachverlage GmbH, Wiesbaden 2009
  • Publisher Name Gabler
  • eBook Packages Business and Economics
  • Print ISBN 978-3-8349-1259-6
  • Online ISBN 978-3-8349-8117-2
  • Buy this book on publisher's site
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Finance, Business & Banking
Engineering