COVID-19: Fear of Pandemic and Short-Term IPO Performance
23 Pages Posted: 12 Feb 2021
Date Written: February 11, 2021
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: Suggested Citation