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.
- 512 Business and Management
- Long-run performance
- Firm quality
Blomkvist, M., Korkeamäki, T., & Pettersson, J. E. (2017). The new issues puzzle revisited: The role of firm quality in explaining IPO returns. Economics letters, 159(October ), 88-91. https://doi.org/10.1016/j.econlet.2017.07.022