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Long-term performance of UK IPOs

Huang, Ji (2011)
Ph.D. thesis, University of Birmingham.

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Abstract

This thesis investigates the long-term post-issue performance using a sample of 1,953 UK non-financial IPOs for the period of 1982-2004. Data is obtained from the LSPD. The main measure of performance includes buy-and-hold abnormal returns, cumulative abnormal returns, and calendar time regression intercepts. Our results indicate the mixed evidence on the long-term post-IPO stock performance. Event time analysis produce significant underperformance at five-year horizon while calendar time regression results show that IPOs perform as good as benchmarks. In conclusion, the relative long-term performance depends on the method and benchmark of examining performance. For example, most results based on BHAR measure suggest that the sample underperforms. Additionally, we assess the choice of data set on the conclusion of long-term post-IPO performance. We find that Datastream (DS) produces similar results as London Share Price Database (LSPD) if equal weight scheme is adopted. Additionally, there is insignificant discrepancy for the value weighted returns. Finally, the thesis reveals that two-stage IPOs do not underperform the benchmarks. Furthermore, two-stage IPOs have similar long-term performance compared to that of regular IPOs listed in AIM. Also, the underpricing for two-stage IPOs is less severe than regular IPOs.

Type of Work:Ph.D. thesis.
Supervisor(s):Jelic, Ranko
School/Faculty:Colleges (2008 onwards) > College of Social Sciences
Department:Birmingham Business School
Subjects:HG Finance
Institution:University of Birmingham
ID Code:1723
This unpublished thesis/dissertation is copyright of the author and/or third parties. The intellectual property rights of the author or third parties in respect of this work are as defined by The Copyright Designs and Patents Act 1988 or as modified by any successor legislation. Any use made of information contained in this thesis/dissertation must be in accordance with that legislation and must be properly acknowledged. Further distribution or reproduction in any format is prohibited without the permission of the copyright holder.
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