Long-run price performance of local and dual class IPOs in alternative investment market

Zbornik radova Ekonomskog fakulteta u Rijeci : časopis za ekonomsku teoriju i praksu

卷:38

Muhammad Zubair Mumtaz¹  Abdul Wahid² 

[1] financial markets and digitalization;

[2] financial economics;

关键词: ipos;    long-run price performance;    extreme bounds analysis;    alternative investment market;   

DOI  :  10.18045/zbefri.2020.1.71

来源: DOAJ

【 摘 要 】

Earlier studies document that IPOs are underpriced in the short-run and underperformed in the long-run. In almost all studies, researchers analyze the IPO performance using the dataset from highly liquid markets. However, the pricing behavior of IPOs in the Alternative Investment Market (AIM) is different. There is a reason to expect the price performance of IPOs in the AIM to be significantly differentfromIPOperformanceintraditionalmarketsmainlybecauseofthe diminished liquidity of AIM offerings as well as the meager disclosures required in comparison to traditional markets. To test our propositions, we select 292 IPOs listed on AIM during the period between 2001 and 2016 and apply the Extreme BoundAnalysis(EBA)todeterminethefactorsthatcauselonger-term performance.Thisstudyreportsthatinvestorsinthealternativemarketsearn significantpositivereturnsifthestockisheldforthreeyears,andtheprice variation is dependent upon the firm size. This illustrates that investment in small-sized firms seems more profitable as compared to those of large-sized firms in the AIM. Moreover, this study examines statistical evidence bearing on the question of whether early investors in IPOs can expect abnormal excess returns in the long-run.

【 授权许可】

Unknown