Has there always been underpricing and long-run underperformance? : IPOs in Germany before World War I

  • This paper provides empirical evidence on initial public offerings (IPOs) by investigating the pricing and long-run performance of IPOs using a unique data set collected on the German capital market before World War I. Our findings indicate that underpricing of IPOs has existed, but has significantly decreased over time in our sample. Employing a mixture of distributions approach we also find evidence of price stabilization of IPOs. Concerning long-run performance, investors who bought their shares in the early after-market and held them for more than three years experienced significantly lower returns than the respective industry as a whole. Earlier versions of this paper were presented at the ABN-AMRO Conference on IPOs in Amsterdam, the Annual Meetings of the European Finance Association, the Annual Meetings of the Verein für Socialpolitik, the IX Tor Vergata International Conference on Banking and Finance in Rome, and at Johann Wolfgang Goethe-University in Frankfurt.

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Author:Christian SchlagORCiDGND, Anja Wodrich
Parent Title (German):Center for Financial Studies (Frankfurt am Main): CFS working paper series ; No. 2000,12
Series (Serial Number):CFS working paper series (2000, 12)
Document Type:Working Paper
Year of Completion:2000
Year of first Publication:2000
Publishing Institution:Universitätsbibliothek Johann Christian Senckenberg
Release Date:2005/06/13
Tag:Impact of Changing Stock-Market Regulation and Institution; Initial Public Offerings; Institutional Setting on Underpricing; Long-Run Underperformance; Prize Stabilization; Underpricing
GND Keyword:Emissionskurs; Going Public; Deutschland; Unterbewertung
Institutes:Wissenschaftliche Zentren und koordinierte Programme / Center for Financial Studies (CFS)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft
Licence (German):License LogoDeutsches Urheberrecht