Net New Equity Issues and IPO Initial Returns
34 Pages Posted: 17 May 2006
Date Written: August 2006
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: Suggested Citation