Net New Equity Issues and IPO Initial Returns

34 Pages Posted: 17 May 2006

See all articles by James A. Ligon

James A. Ligon

University of Alabama

Qiming Wang

Willamette University - Atkinson Graduate School of Management

Date Written: August 2006

Abstract

Net new equity issues, defined as the amount of new equity issued less the amount of seasoned equity retired, is significantly negatively related to the level of future IPO initial returns, both on average and at the firm level. The extreme fluctuations in net new equity issues play an important role in explaining the variation of IPO initial returns over time.

Keywords: Net new equity issues, IPO, IPO initial returns

JEL Classification: G20

Suggested Citation

Ligon, James A. and Wang, Qiming, Net New Equity Issues and IPO Initial Returns (August 2006). Available at SSRN: https://ssrn.com/abstract=902407 or http://dx.doi.org/10.2139/ssrn.902407

James A. Ligon (Contact Author)

University of Alabama ( email )

P.O. Box 870244
Tuscaloosa, AL 35487
United States
205-348-6313 (Phone)
205-348-0590 (Fax)

Qiming Wang

Willamette University - Atkinson Graduate School of Management ( email )

900 State Street
Salem, OR 97301
United States

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