Initial Public Offerings

Posted: 19 Jun 2002

See all articles by Dirk Brounen

Dirk Brounen

Erasmus University Rotterdam (EUR) - Department of Financial Management; Erasmus Research Institute of Management (ERIM); Tinbergen Institute

Piet M. A. Eichholtz

University of Maastricht - Limburg Institute of Financial Economics (LIFE)

Abstract

This paper investigates the underpricing and long-run performance of Initial Public Offerings (IPOs), using a unique sample consisting of 54 British, French and Swedish property companies, which became publicly listed during the period 1984-1999. Similar to common stock IPOs, the European property share IPOs in our sample outperformed the benchmark on the first day of trading, on average with 2.55%. However, these property share IPOs tend to underperform their benchmark over the twelve-month period subsequent to the initial offering. We also examine explanatory factors such as issue size, the degree of debt financing, ex-ante uncertainty, and the underlying property types of the companies involved. The results are in line with those previously found for common stocks.

Keywords: IPO underpricing, equity issues, property companies

Suggested Citation

Brounen, Dirk and Eichholtz, Piet M. A., Initial Public Offerings. Available at SSRN: https://ssrn.com/abstract=301095

Dirk Brounen (Contact Author)

Erasmus University Rotterdam (EUR) - Department of Financial Management ( email )

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Erasmus Research Institute of Management (ERIM) ( email )

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Tinbergen Institute ( email )

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Piet M. A. Eichholtz

University of Maastricht - Limburg Institute of Financial Economics (LIFE) ( email )

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Maastricht, 6200 MD
Netherlands
+31 43 3883648 (Phone)
+31 43 3258530 (Fax)

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