The IPO Derby: Are there consistent losers and winners on this track?

Konan Chan, John W. Cooney, Joonghyuk Kim, Ajai K. Singh

Research output: Contribution to journalArticle

26 Scopus citations

Abstract

We examine the individual and joint relation of discretionary accounting accruals, underwriter reputation, and venture capital backing with the long-run performance of initial public offerings (IPOs). We find that although correlated to some extent, these variables do not manifest the same underlying phenomena in their relation to IPOs' performance. The confluence of the variables is more important than using any one of them individually to identify IPOs that exhibit abnormal long-run stock returns. The combination of their negative aspects helps identify extreme under-performers. We also identify a set of winner IPOs by combining the positive aspects of the three variables.

Original languageEnglish
Pages (from-to)45-79
Number of pages35
JournalFinancial Management
Volume37
Issue number1
DOIs
StatePublished - Mar 2008

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