Post-Ipo Operating Performance, Venture Capitalists and Market Timing

Essex Finance Centre Discussion Paper No. 04/16

41 Pages Posted: 26 Nov 2004

See all articles by Jerry Coakley

Jerry Coakley

University of Essex - Essex Business School

Leon Hadass

University of Essex

Andrew Wood

University of Essex - Department of Accounting, Finance & Management

Date Written: November 2004

Abstract

We analyse the post-issue operating performance of 304 venture-backed and 264 non-venture UK IPOs 1985-2000. IPOs exhibit a significant five-year, post-issue operational decline over the full sample period. However this is driven by a particularly poor performance by venture-backed and non-venture IPOs during the 1998-2000 bubble while underperformance by both is insignificant 1985-1997. Cross-section regression results indicate a significantly positive relationship between post-IPO operating performance and venture capitalist certification 1985-1997 and a negative relationship with initial returns 1998-2000. We conclude that the bubble period points to the influence of both market timing and investor sentiment on long run operating performance.

Keywords: Bubble, market timing, investor sentiment

JEL Classification: D92, G24

Suggested Citation

Coakley, Jerry and Hadass, Leon and Wood, Andrew, Post-Ipo Operating Performance, Venture Capitalists and Market Timing (November 2004). Essex Finance Centre Discussion Paper No. 04/16. Available at SSRN: https://ssrn.com/abstract=623227 or http://dx.doi.org/10.2139/ssrn.623227

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

Leon Hadass

University of Essex ( email )

Wivenhoe Park
Colchester, CO4 3SQ
United Kingdom

Andrew Wood

University of Essex - Department of Accounting, Finance & Management ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

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