Post-Ipo Operating Performance, Venture Capitalists and Market Timing

Coakley, Jerry; Hadass, Leon; Wood, Andrew

doi:10.2139/ssrn.623227

Download This Paper

Open PDF in Browser

Add Paper to My Library

Post-Ipo Operating Performance, Venture Capitalists and Market Timing

Essex Finance Centre Discussion Paper No. 04/16

41 Pages Posted: 26 Nov 2004

See all articles by Jerry Coakley

Jerry Coakley

University of Essex - Essex Business School

Andrew Wood

University of Essex - Department of Accounting, Finance & Management

Date Written: November 2004

Abstract

We analyse the post-issue operating performance of 304 venture-backed and 264 non-venture UK IPOs 1985-2000. IPOs exhibit a significant five-year, post-issue operational decline over the full sample period. However this is driven by a particularly poor performance by venture-backed and non-venture IPOs during the 1998-2000 bubble while underperformance by both is insignificant 1985-1997. Cross-section regression results indicate a significantly positive relationship between post-IPO operating performance and venture capitalist certification 1985-1997 and a negative relationship with initial returns 1998-2000. We conclude that the bubble period points to the influence of both market timing and investor sentiment on long run operating performance.

Keywords: Bubble, market timing, investor sentiment

JEL Classification: D92, G24

Suggested Citation: Suggested Citation

Coakley, Jerry and Hadass, Leon and Wood, Andrew, Post-Ipo Operating Performance, Venture Capitalists and Market Timing (November 2004). Essex Finance Centre Discussion Paper No. 04/16, Available at SSRN: https://ssrn.com/abstract=623227 or http://dx.doi.org/10.2139/ssrn.623227