The Post-Issue Operating Performance of IPO Firms
1994; Wiley; Volume: 49; Issue: 5 Linguagem: Inglês
10.2307/2329268
ISSN1540-6261
Autores Tópico(s)Private Equity and Venture Capital
ResumoThe Journal of FinanceVolume 49, Issue 5 p. 1699-1726 Article The Post-Issue Operating Performance of IPO Firms BHARAT A. JAIN, BHARAT A. JAINSearch for more papers by this authorOMESH KINI, OMESH KINIJain is from Towson State University, and Kini is from Emory University. We are grateful to Tim Loughran, Shehzad Mian, Chris Muscarella, Keith Ord, Jay Ritter, Dennis Sheehan, Greg Waymire, seminar participants at the 1993 Financial Management Association Meetings, the editor (René Stulz), and two anonymous referees for providing helpful comments and suggestions. Janki Kini provided valuable research assistance. We are responsible for any remaining errors.Search for more papers by this author BHARAT A. JAIN, BHARAT A. JAINSearch for more papers by this authorOMESH KINI, OMESH KINIJain is from Towson State University, and Kini is from Emory University. We are grateful to Tim Loughran, Shehzad Mian, Chris Muscarella, Keith Ord, Jay Ritter, Dennis Sheehan, Greg Waymire, seminar participants at the 1993 Financial Management Association Meetings, the editor (René Stulz), and two anonymous referees for providing helpful comments and suggestions. Janki Kini provided valuable research assistance. We are responsible for any remaining errors.Search for more papers by this author First published: December 1994 https://doi.org/10.1111/j.1540-6261.1994.tb04778.xCitations: 421 Read the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onEmailFacebookTwitterLinkedInRedditWechat ABSTRACT 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. Post-issue declines in the market-to-book ratio, price/earnings ratio, and earnings per share are also documented. REFERENCES Allen, F., and G. R. Faulhaber, 1989, Signaling by underpricing in the IPO market, Journal of Financial Economics 23, 303–323. Chan, L., and J. Lakonishok, 1992, Robust measurement of beta risk, Journal of Financial and Quantitative Analysis 27, 265–282. Clarkson, P. M., and R. 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