SEMINAR IN FINANCE
Christian Helmenstein, Gabriel Lee
(Biweekly Mondays)
Monday, 21. April 1997
Wolfgang AUSSENEGG
(Technical University of Vienna
Short and Long-Run Performance of IPOs in the Austrian Stock Market
Abstract:
This paper investigates the price behaviour of initial public offerings
(IPOs) of equities listed on the Vienna Stock Exchange during the period
from 1984 to 1996. In accordance with the findings for other markets, the
average initial returns of Austrian IPOs are significantly positive. For a
total sample of 66 IPOs, an average first day return of 6.5 per cent is
documented which is lower than for most other IPO markets. More than a
quarter of all IPOs are overpriced with negative initial returns. Several
hypotheses to explain the observed unterpricing of Austrian IPOs are tested.
The short-run aftermarket performance (first year) is found to be not
significantly different from zero, whereas in the long-run (first three
years) the total sample of Austrian IPOs underperform benchmark firms. An
investor would have had to invest 22 per cent more money in IPOs than in non
IPO firms of similar size to have the same wealth three years after the
offering date. There is also evidence that the main reason for this
underperformance are poorly performing family-owned IPOs.
Place: Institute for Advanced Studies, Stumpergasse 56, 1060 Vienna, SZ VI
Time: 17:00h-18:30h
Info:
http://www.wsr.ac.at/ihs-html/fin/finsem.html
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