Post-IPO Operating Performance, Venture Capital and the Bubble Years

24 Pages Posted: 11 Dec 2007

See all articles by Leon Hadass

Leon Hadass

University of Essex

Jerry Coakley

University of Essex - Essex Business School

Date Written: 2007-01

Abstract

We analyse the post-issue operating performance of 316 venture-backed and 274 non-venture UK IPOs 1985-2003. The finding of a statistically significant five-year, operational decline exhibited over the full sample period is not robust. Rather it is driven by the dramatic under performance during the 1998-2000 bubble years while IPOs perform normally in the remaining years. Cross-section regression results indicate support for venture capital certification in the non-bubble years but a significantly negative relationship between operating performance and venture capitalist board representation during the bubble years. The bubble year under performance is explained by market timing and by low quality companies taking advantage of investor sentiment.

Suggested Citation

Hadass, Leon and Coakley, Jerry, Post-IPO Operating Performance, Venture Capital and the Bubble Years (2007-01). Journal of Business Finance & Accounting, Vol. 34, Issue 9-10, pp. 1423-1446, November/December 2007. Available at SSRN: https://ssrn.com/abstract=1065853 or http://dx.doi.org/10.1111/j.1468-5957.2007.02055.x

Leon Hadass

University of Essex ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Jerry Coakley (Contact Author)

University of Essex - Essex Business School ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom
+44 1206 872455 (Phone)
+44 1206 873429 (Fax)

HOME PAGE: http://www.essex.ac.uk/afm/staff/coakley.shtm

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