The new issues puzzle revisited: The role of firm quality in explaining IPO returns

Magnus Blomkvist; Timo Korkeamäki; John Erik Pettersson

doi:10.1016/j.econlet.2017.07.022

The new issues puzzle revisited: The role of firm quality in explaining IPO returns

Magnus Blomkvist, Timo Korkeamäki, John Erik Pettersson

Finance, Helsinki

Research output: Contribution to journal › Article › Scientific › peer-review

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Abstract

We study the risk and return characteristics of IPOs for up to 60 months. After controlling for Asness et al. (2014) quality minus junk factor, IPOs outperform the benchmark portfolios. The previously-documented negative abnormal IPO returns may derive from inaccurate benchmarks.

Original language	English
Peer-reviewed scientific journal	Economics Letters
Volume	159
Issue number	October
Pages (from-to)	88-91
Number of pages	4
ISSN	0165-1765
DOIs	https://doi.org/10.1016/j.econlet.2017.07.022
Publication status	Published - 10.2017
MoE publication type	A1 Journal article - refereed

Keywords

512 Business and Management
IPOs
Long-run performance
Firm quality

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10.1016/j.econlet.2017.07.022

QMJIPOfinal_18072017Accepted author manuscript, 64.3 KBLicence: CC BY-NC-ND

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abstract = "We study the risk and return characteristics of IPOs for up to 60 months. After controlling for Asness et al. (2014) quality minus junk factor, IPOs outperform the benchmark portfolios. The previously-documented negative abnormal IPO returns may derive from inaccurate benchmarks.",

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The new issues puzzle revisited: The role of firm quality in explaining IPO returns

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