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- Title
The IPO Derby: Are There Consistent Losers and Winners on This Track?
- Authors
Chan, Konan; Cooney Jr., John W.; Joonghyuk Kim; Singh, Ajai K.
- Abstract
We examine the individual and joint relation of discretionary accounting accruals, underwriter reputation, and venture capital hacking with the long-run performance of initial public offerings (IPOs). We find that although correlated to some extent, these variable do not manifest the same underlying phenomena in their relation to IPOs' performance. The confluence of the variables is more important than using any one of them individually to identify IPOs that exhibit abnormal long-run stock returns. The combination of their negative aspects helps identify extreme under-performer. We also identify a set of winner IPOs by combining the positive aspects of the three variables.
- Subjects
GOING public (Securities); VENTURE capital; RATE of return; STOCKS (Finance); ACCRUAL basis accounting; VARIABLE interest rates
- Publication
Financial Management (Wiley-Blackwell), 2008, Vol 37, Issue 1, p45
- ISSN
0046-3892
- Publication type
Article
- DOI
10.1111/j.1755-053X.2008.00002.x