The Long-Run Post-Offer Performance of Subsequent Ipos

Abstract

We examine post-offer stock price performance of equity IPO firms that have prior public debt offerings (subsequent IPOs). We find that though subsequent IPO firms experience a lesser degree of stock price underperformance than regular IPO firms, the difference is not statistically significant. Information asymmetry, though explains the relative underpricing of subsequent IPOs, does not play a major role in the post-offer underperformance of subsequent IPO firms relative to their peers.

Keywords: Subsequent initial public offers, Post-offer underperformance and information asymmetry