Australian IPO pricing in the short and long run

We analyse both initial underpricing and post-listing returns for Australian IPOs. Our results are consistent with the view that unique institutional characteristics may have overwhelmed previous Australian tests of equilibrium models of IPO underpricing. The results also show that Australian IPOs s...

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Bibliographic Details
Published inJournal of banking & finance Vol. 20; no. 7; pp. 1189 - 1210
Main Authors Lee, Philip J., Taylor, Stephen L., Walter, Terry S.
Format Journal Article
LanguageEnglish
Published Amsterdam Elsevier B.V 01.08.1996
Elsevier
Elsevier Sequoia S.A
SeriesJournal of Banking & Finance
Subjects
Anomalies
Economic models
Finance
Going public
Initial public offerings
Initial public offers
Long-run returns
Pricing
Stock prices
Studies
Underpricing
Australia
Underpricing
Long-run returns
G 24
G 14
Initial public offers
Anomalies
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Summary:We analyse both initial underpricing and post-listing returns for Australian IPOs. Our results are consistent with the view that unique institutional characteristics may have overwhelmed previous Australian tests of equilibrium models of IPO underpricing. The results also show that Australian IPOs significantly underperform market movements in the three-year period subsequent to listing. Further investigation of these anomalous post-listing returns lead us to reject various ‘speculative bubble’ explanations. Rather, the evidence suggests a curvilinear relationship between initial and subsequent returns, although the economic significance of the relationship is low.
Bibliography:ObjectType-Article-2
SourceType-Scholarly Journals-1
ObjectType-Feature-1
content type line 23
ISSN:0378-4266
1872-6372
DOI:10.1016/0378-4266(95)00053-4