COVID-19: Fear of Pandemic and Short-Term IPO Performance

23 Pages Posted: 12 Feb 2021

See all articles by Sharif Mazumder

Sharif Mazumder

Oklahoma State University - Stillwater - Spears School of Business

Pritam Saha

Texas Tech University - Area of Finance

Date Written: February 11, 2021

Abstract

This study analyzes the relationship between COVID-19 related fear and short-term IPO performance. Though the average market-adjusted initial return of IPOs in the year 2020 is higher than that of the last four decades, it decreases if fear of pandemic increases. The evidence is robust when we use matching firm-adjusted initial returns. Next, we analyze the persistence of performance after the IPO date. The results show that the performance of IPO firms is more sensitive to the fear of the pandemic than the performance of similar existing firms.

Keywords: Initial returns, fear of COVID-19, event study

JEL Classification: G01, G11, G14

Suggested Citation

Mazumder, Sharif and Saha, Pritam, COVID-19: Fear of Pandemic and Short-Term IPO Performance (February 11, 2021). Finance Research Letters, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3784013 or http://dx.doi.org/10.2139/ssrn.3784013

Sharif Mazumder (Contact Author)

Oklahoma State University - Stillwater - Spears School of Business ( email )

201 Business
Stillwater, OK 74078-0555
United States

Pritam Saha

Texas Tech University - Area of Finance ( email )

Lubbock, TX 79409
United States

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