The long-run underperformance of IPOs [ ]


This research has been conducted to determine the long run performance of IPOs (Initial Public Offerings) listed in NYSE ( New York Stock Exchange). Three years data has been collected for assessment of IPOs, which were listed in between 1994 to 2005. The sample of 229 IPOs was taken. Two methods such as BHAR (Buy and Hold Abnormal Returns) and CAR (Cumulative Abnormal Returns) have been used to investigate the scenario. It is concluded by the study that IPOs performed poorly by the result of BHAR and CAR as 50% and 47% respectively. The NYSE All Share Index has been used as the threshold by the researchers. Different returns have been found due to fluctuations with the passage of time (Aggarwal, Leal, & Hernandez, 1993).