The Post-Issue Operating Performance of IPO Firms

Posted: 6 Jan 2000

See all articles by Bharat A. Jain

Bharat A. Jain

Towson University

Omesh Kini

Georgia State University

Abstract

This paper investigates the change in operating performance of firms as they make the transition from private to public ownership. It documents a significant decline in operating performance subsequent to the initial public offering (IPO). Additionally, it finds a significant positive relation between post-IPO operating performance and equity retention by the original entrepreneurs but does not find any relation between post-IPO operating performance and the level of initial underpricing. Post-Issue declines in the market-to- book ratio, P/E ratio and the earnings per share are also documented.

JEL Classification: G32

Suggested Citation

Jain, Bharat A. and Kini, Omesh, The Post-Issue Operating Performance of IPO Firms. Available at SSRN: https://ssrn.com/abstract=5655

Bharat A. Jain (Contact Author)

Towson University ( email )

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Towson, MD 21252
United States
410-704-3542 (Phone)

Omesh Kini

Georgia State University ( email )

University Plaza
Atlanta, GA 30303-3083
United States
404-651-2656 (Phone)

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