Initial Public Offerings

and several anonymous underwriters for their helpful suggestions. An anonymous referee of this journal and Peter Pope (editor) provided valuable comments that substantially improved earlier versions of the manuscript. The usual disclaimer applies.

Este estudo testa a teoria das janelas de oportunidade (EMTT) para o mercado acionário brasileiro. Este texto é uma adaptação do artigo de Baker e Wurgler ( ) que testaram com sucesso essa teoria para o mercado acionário americano. A teoria não foi comprovada no mercado brasileiro. A alavancagem diminuiu no primeiro ano após as ofertas públicas iniciais (IPO), mas cresceu novamente sem apresentar a persistência necessária para corroborar a teoria.

This paper examines the effects of audit firm mergers on market concentration, competitiveness and audit pricing in the UK. Our results indicate that the large audit firms increased their market,share between,1985 and 2002 by merging and expanding into new sectors. However, contrary to popular belief, the significant fee discounting

Valeur d'entreprise = capitalisation boursière de la société + valeur de marché de ses dettes financières nettes. 2. Prix auquel a été valorisée la société à l'occasion d'un transfert de contrôle. 3. L'Ebitda (Earning Before Interest, Tax, Depreciation and Amortization) correspond approximativement à l'excédent brut d'exploitation défini par le PCG (après déduction de la participation des salariés). 4. L'Ebit (Earning Before Interest and Tax) correspond au résultat opérationnel défini par les normes comptables internationales. Tableau 1 -Méthodes d'évaluation et multiples les plus utilisés par les analystes financiers Auteurs Chastenet et Jeannin (2007) Bellier Delienne et Bour (2007) Harbula (2009) Bancel et Mittoo (2013)

of the Arab Monetary Fund. The authors would like to thank Miss Ayten Fatheldin for her excellent research assistance. The views expressed in the paper are not necessarily those of the Arab Monetary Fund. AMF Economic papers are written by members of the Economic

The academic literature is quite rich in exploring Initial Public Offerings (IPOs) in developed markets and to a lesser degree in emerging markets. However, seldom one can find research on IPOs in start-up stock exchanges. Such is the case of the Cyprus Stock Exchange which was inaugurated in March 1996 and this thesis looks at IPOs that took place over a period of six years (1997)(1998)(1999)(2000)(2001)(2002). Therefore, the first motivation is to explore this setting for IPOs. Moreover, the Cyprus Stock Exchange is probably the least researched stock exchange in the European Union. Out of the 12 vii TABLE OF CONTENTS ABSTRACT .

The academic literature is quite rich in exploring Initial Public Offerings (IPOs) in developed markets and to a lesser degree in emerging markets. However, seldom one can find research on IPOs in start-up stock exchanges. Such is the case of the Cyprus Stock Exchange which was inaugurated in March 1996 and this thesis looks at IPOs that took place over a period of six years (1997)(1998)(1999)(2000)(2001)(2002). Therefore, the first motivation is to explore this setting for IPOs. Moreover, the Cyprus Stock Exchange is probably the least researched stock exchange in the European Union. Out of the 12 vii TABLE OF CONTENTS ABSTRACT .

This paper studies whether retained ownership affects the value of the initial public offerings (IPOs) in Turkey, an emerging market. The findings show that the coefficient corresponding to the ownership retention signal is positive for a sample 67 IPOs that listed on Istanbul Stock Exchange (ISE) between 2000 and 2010 (inclusive) implying that initial valuation increases with ownership retention signal at IPO stage. The study further suggests that primary share issuing is a stronger signal on firm value and again it affects IPO firm value positively.

This paper investigates the impact of venture capitalists (VCs) on the performance of their portfolio firms around and after initial public offering (IPO). The aim is to shed some additional light on the function of VCs in nurturing and developing their portfolio firms as well as on some mechanisms of the IPO market. Our main working hypothesis is that venture capital is too heterogenous to permit simple comparison between non venture and venture-backed firms. We investigate the hypothesis that different governance structures, objectives, and track records of different types of VCs have a significant impact on their respective IPOs. Doing this, we compare the extent of underpricing and the post-IPO returns and volatility. We explore these issues using a data set embracing all IPOs that have occurred on Germany's Neuer Markt. This segment has proven to be a natural playing field for such a research strategy, deferring a number of obvious advantages. Its main advantage is that, due to the specific situation of the German venture capital market (a young, rapidly growing market coupled with a strong public sector), we find a wide array of different types of venture capitalists with quite different structures, objectives, and track records. Our main aim is to exploit just this difference and its impact on the performance of portfolio firms. We find significant differences among different types of VCs with respect to the post-IPO market performance. It turns out that firms backed by independent VCs perform significantly better than firms of other VCs or non venture-backed ones. Firms backed by public VCs (only a small group of firms) underperform relative to their counterparts. In addition, we find that independent VCs have a significant impact on the reduction of firm-specific volatility. Thus, independent VCs bring about higher (relative) post-IPO returns and less risk.

This study attempts to decode the puzzle surrounding the pricing of equity IPOs issued through bookbuilding pricing method in India in the period from 2000 to 2014. Using a sample of 100 bookbuilt IPO issues in the study period the study reveals the significant value drivers for IPO price by applying multivariate regression analysis to a select set of explanatory variables for IPO value. The study results establish post issue promoter and promoter groups retained ownership levels, Net worth per equity share, industry composite price to earnings ratio, earnings per share and rate of subscription of IPOs by institutional investors as significant pricing determinants of sample bookbuilt IPOs.

The main objective of any business is to maximize shareholders‟ wealth therefore this study endeavored to find out whether Initial Public Offers (IPOs) actually help a firm to achieve this objective in the long run. This study thus sought to find out the long run performance of a company‟s stock after it goes public. The study therefore looked at variables that show the performance of the stock in the long run such as share price, earnings per share and price earnings ratio of the stock. The study analyzed seven companies which went public between 2000 and 2006 using the Buy and Hold Abnormal Returns (BHAR) model. Observations were made on a yearly basis over six years to allow the researcher to analyze (BHAR) for the period of six years. The study drew data from balance sheets and the Income statements and information from the Nairobi Securities Exchange (NSE) on the companies‟ earnings. Hypothesis testing was done using the student‟s t-test at 95% confidence level to find whether ...

This paper analyses the performance of all P O s in the Malaysian stock market between 1995 to October 1997. The effects of underpricing are examined based on the two trading boards , the main and second board. This study extends the analysis by examining the IPOs performance by the size of offerings. We find evidence that all the Malaysia lPOs are underpriced and that companies trading on the second board tend to be more underpriced. We also find evidence that small size offerings produces higher initial returns. Companies need capital for investment and expansion One way of raising capital from investors is to go '>ublic"selllng ownership rights in the company that entitle the investor to a share of the company's profits and a say in the way the company is run. This is done by initial public offerings (PO) of stock , that is by selling stocks of the company for the first time for expausion. The increased number of IPOs in Malaysia is a direct result of growth whexeby homegrown companies, mostly initially set up as familyowned businesses, decided to drversify and expand.

Abstract: This paper analyses the process of going public in Romania via initial public offerings of shares to investors. Various features of the domestic IPOs that took place over the period from 2002 to 2007 are discussed, with an emphasis on the volume of new listings and its explanatory factors, the costs of going public and the initial returns of the IPOs.

The presence of venture capital in the ownership structure of U.S. firms going public has been associated with both improved long-term performance and lower underpricing at the time of the IPOs. In Japan, we find the long-run performance of venture capital-backed IPOs to be no better than that of other IPOs, with the exception of firms backed by foreign owned or independent venture capitalists. Many of the major venture capital firms in Japan are subsidiaries of securities firms that may face a conflict of interest when underwriting the venture capital-backed issue. When venture capital holdings are broken down by their institutional affiliation, we find that firms with venture backing from securities company subsidiaries do not perform significantly worse over a three-year time horizon than other IPOs. On the other hand, we find that IPOs in which the lead venture capitalist is also the lead underwriter have higher initial returns than other venture capital-backed IPOs. The latter result suggests that conflicts of interest influence the initial pricing, but not the long-term performance, of initial public offerings in Japan. Institutional Affiliation and the Role of Venture Capital: Evidence from Initial Public Offerings in Japan

This study is aimed to analyze long run performance of initial public offerings (IPOs) in Pakistan by taking the sample of 15 firms for the period of 2006 to 2011. We took secondary data for our research from KSE, SBP, and Brecorder. Stock returns of IPO firms are considered as dependent variables and firm size, firm age, profitability and leverage ratios are considered as explanatory variables for the long run performance of IPOs. Previous literature on IPOs indicates that IPOs underperform in the long run. Firm's size and profitability have some significant positive correlation with the IPOs long run performance. All the findings of this research paper depend upon the background of the different industry sectors, the perspective of the study and sample distribution. And the Leverage ratio and Age of the firms are negatively correlated with the long run performance of the IPOs.

This paper presents evidence regarding the two quantitiable components of the costs of going publtc: direct expenses and underpricing. Together, these costs average 21.25 of the realized market value of the securities issued for firm commitment offers and 31.87% for best efforts otTers. For a given size offer. the direct expenses are of the same order of magnitude for both contract tcpcs. but the underpricing is greater for best efforts offers. An explanation of why some tirms choose to use best efforts offers in spite of their apparent higher total costs is given. *Useful comments from E. Han Kim. Saman Majd. Nejat Seyhun, an anonymous referee. and Clifford Smith and Michael Jensen (the editors). are gratefully acknowledged. Special thanks are owed to Harrv DeAngelo. whose extensive comments have substantially improved the substance and exposition of this paper. An earlier version of this paper, entitled 'The Choice Between Firm Commitment and Best Efforts Contracts' was presented at the

We examine the relation between institutions' investment horizons on firms' financing and investment decisions. Firms with larger short-term institutional ownership use less debt financing and invest more in corporate liquidity. In contrast, firms with larger long-term institutional ownership use more internal funds, less external equity financing, and preserve investments in long-term assets. These results are primarily driven by the variation in informational preferences of different institutions. We argue that short-term (long-term) institutions collect and use value-neutral (value-enhancing) information.

This paper provides evidence consistent with shareholders' personal tax incentives affecting stock prices and trading volume. On June 24, 1998, the marginal tax rate on capital gains was reduced from 28 percent to 20 percent for individual investors holding shares between 12 and 18 months. This study compares firms whose initial public shareholders immediately benefited from the reduction to other IPO firms. The sample of immediately affected firms recorded mean, incremental, one-day stock price declines of-1.3 percent amid heavy trading. The results are consistent with capital gains tax planning constraining investment portfolio management. When the constraint was lifted, enough shareholders sold that prices moved. The results imply that despite increasingly liquid capital markets, transaction costs remain large enough to prevent investors from entering the market immediately and fully offsetting downward price pressure from individual capital gains tax management.

Using 550 million limit orders submitted in the Korea Stock Exchange, we estimate demand and supply elasticities of heterogeneous investor types and their changes around the Asian financial crisis. We find that domestic individuals have substantially more inelastic demand and supply curves than domestic institutions and foreign investors. The crisis permanently reduced price elasticities of domestic individuals by 50% but had no effect on those of foreign investors. Institutional changes restricting margin purchases, implemented after the crisis, seem particularly important in explaining the dramatic drop. Information heterogeneity, availability of close substitutes and arbitrage risk also explain time-series variations in elasticities.

This paper divides Chinese A-Share IPO initial returns into the initial return in the primary market and in the secondary market. Our empirical evidence shows that the initial abnormal return in the secondary market is significantly positive. This study also finds that 1) the initial return in the primary market is negatively related to the subscription or lottery ratio; 2) the initial return in the secondary market is positively related to the market return, and negatively related to IPO offering prices; 3) the initial turnover is negatively related to the offering size; 4) the initial turnover has no impact on the initial return in the secondary market but the latter has a significantly positive influence on the initial turnover.

This paper documents differences in the performance of bank and nonbank initial public offerings (IPOs) in Mexico during 1987-1993. We measure performance relative to the Mexican stock market index. Banks experience much larger initial underpricing than nonbanks due in part to a hot issue market in 1987. In the aftermarket, excess returns for banks, industrials, and services are not significant. Excess aftermarket returns for brokerage houses are significantly negative. We also find that underpricing of the privatized IPOs diminishes over time, supporting the argument that the Mexican government offered discounts on IPOs issued early in the privatization program.

This paper examines open market stock repurchases by Greek firms, using a unique dataset covering the period 2000-2010. Positive and statistically significant cumulative average abnormal returns are observed around the date of repurchase program authorizations. Investors react more to authorizations of initial programs than to subsequent programs. After the implementation of the EU Market Abuse Directive in Greece, investors react more favorably to buyback announcements. The reason for initiating a repurchase program, as stated by the companies, is directly related to the market valuation of the program. The paper identifies the characteristics of firms that announce dividend changes, given the decision to initiate a stock buyback. The regression results appear to support the hypothesis of signaling undervaluation.

Between 1999 and 2007, WR Hambrecht has completed 19 IPOs in the U.S. using an auction mechanism. We analyze investor behavior and mechanism performance in these auctioned IPOs using detailed bidding data. The existence of some bids posted at high prices suggests that some investors (mostly retail) try to free-ride on the mechanism. But institutional demand in these auctions is very elastic, suggesting that institutional investors reveal information in the bidding process. Investor participation is largely predictable based on deal size, and demand is dominated by institutions. Flipping is equally prevalent in auctions as in bookbuilt deals-but unlike in bookbuilding, investors in auctions tend to flip their shares more in cold deals. Finally, we find that institutional investors, who provide more information, are rewarded by obtaining a larger share of the deals that have higher initial returns. Our results therefore suggest that auctioned IPOs could be an effective alternative to traditional bookbuilding.

thanks for enlightening discussions, stunning hikes, unforgettable USIVoices concerts, engaging soccer and volleyball matches, amusing karaoke nights, inspiring piano and singing lessons, wonderful LAC events. Thanks for always being there, in good and bad times. This thesis is dedicated to my family, for their unconditional and constant love, support, patience, and care, that kept me going. * We thank an anonymous practitioner, Laurent Frésard, Gerard Hoberg, Fabrizio Mazzonna, René Stulz, Gabriela Znamenackova (discussant), and seminar participants at the SFI Research Days 2017 in Gerzensee, Switzerland, for helpful comments and discussions. We are grateful to the web group and Investment Management Division of the Securities and Exchange Commission for their precious suggestions and clarifications during our data collection phase. We thank Jay Ritter for making IPO data available on his website, and Kenneth French for making the Fama-French industry classification available on his website. All errors and omissions are our own.

This paper provides some new evidence on the determinants of long run operating and share price performance of Initial Public Offerings (IPO) on the Johannesburg Stock Exchange (JSE). It has been hypothesised that the information contained in the pre listing documents could shed some light on the aftermarket performance of South African IPO shares. In line with previous literature, South African IPO shares significantly underperformed the market on average. Additionally, there is a statistically significant negative relationship between IPO Volume and long run performance, suggesting that the South African IPO market may be subject to the 'fads and over optimism' theory of Ritter (1991). The overoptimism hypothesis is further cemented by a negative correlation between pre IPO revenue forecast and aftermarket operating performance. Listing expenses play a moderate role in the reduction of the aftermarket performance of IPOs on the JSE. However, it appears that international investment banks have a positive influence on the aftermarket performance of IPOs on the JSE. Likewise, firms audited by the BIG 4 audit firms tend to perform well in terms of aftermarket buy and hold returns. Large firms at the time of listing tend to perform well and firms with high growth prospects at the time of listing generate a negative and significant return on their investment in total assets. Although the contingent liabilities disclosed in the prelisting reports negatively influence most of the measurers of aftermarket performance, the relationship is, by and large, insignificant.

While a number of countries have tried the use of sealed bid share auctions for initial public offerings (IPOs), few continue to use them. This is a puzzle, since auctions have been successfully used in a variety of situations for other financial securities, particularly for the sale of government bonds. We provide an explanation for this puzzle: Bidding in sealed bid auctions for new issues is complex, particularly when the underlying shares are difficult to value and the auction is open to large numbers of potential bidders, some of whom might be naïve. Participation fluctuations make it difficult for even sophisticated bidders to shave accurately for the winner's curse, and mistakes by some bidders impose costs on all. Our findings suggest that a hybrid auction mechanism that limits participation in the auction tranche to sophisticated investors, along with a non-competitive tranche that is open to all investors, can reduce such mistakes while at the same time providing the necessary incentives for information gathering.

and the many officials at various stock exchanges, regulatory agencies and research institutes for help in gathering the information used in this study (especially the Singapore Exchange, Istanbul Stock Exchange and Euronext). Some of the material in Table 2 circulated in an earlier working paper titled Global Trends in IPO Methods: Book Building vs. Auctions. Any inaccuracies or errors are, of course, entirely our own. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peerreviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

In this paper, we study a large sample of 507 privatization offerings from 39 countries over the period 1979-1996. Our objectives are twofold. First, we document the extent of short-run underpricing of these privatization offerings and measure their variation across countries, industries, and years, as well as drawing comparisons to private company IPOs. Second, we test alternative explanations of the determinants of short-run underpricing drawing on various models of maximizing behavior by underwriters, augmented by variables that proxy for national political objectives. Overall, we find support for elements of asymmetric information theory, investor sentiment theory and the reputation building hypothesis. With the exception of the Gini coefficient, our political proxy variables are typically not significant. Thus to a significant degree, the investment banking strategies believed to characterize IPOs of private companies in industrial countries may also play a role in the IPO strategies of state-owned-enterprises in both industrial and lesser developed economies.

This paper examines the short-term and long-term returns of a sample of foreign equities traded on the New York Stock Exchange as American Depository Receipts (ADRs) issued between 1st January, 1987, and 30th September, 2000. Distinctions are made between those ADRs issued as initial public offerings (IPOs) and as seasoned equity offerings (SEOs) and those before and after 1st June, 1998. The results suggest that, on average, ADR IPOs and SEOs issued prior to 1st June, 1998, underperform the S&P500 in both short-term and long-term holding periods. Conversely, ADR IPOs and SEOs issued after 1st June, 1998, either perform equally or outperform the S&P500 in both short-term and long-term holding periods. Overall, the results suggest that non-negative and even positive significant cumulative wealth effects associated with stock market timing may exist for ADR IPOs and SEOs trading during holding periods in bear markets.

Estructura de Colocación y Rendimiento Inicial de Salidas a Bolsa: Tecnológicas Frente a … 80 En este trabajo se analiza la relación entre el rendimiento inicial y la estructura de la colocación de las acciones admitidas a cotización. El objetivo del estudio es determinar hasta qué punto la fuerza y la naturaleza de esta relación están influidas por el sector de actividad y, concretamente, por la pertenencia o no al sector tecnológico. Para ello se han ajustado modelos de regresión lineal sobre dos muestras segmentadas de compañías estadounidenses. La comparación de los resultados sugiere que la diferencia entre ser de tipo tecnológico o no, se extiende más allá de una mera prima de riesgo y afecta profundamente a la forma en que la estructura afecta a la infravaloración.

The choice of exit mechanism between IPOs and acquisitions is an important decision faced by entrepreneurs and private equity investors. Although the decision to go public has been studied extensively, a firm's choice between IPO and acquisition remains relatively unexplored. In this paper, we extend the existing literature by studying the effect of the type of IPO process on the decision. We introduce the two IPO methods: book building and auctions, and show how the parameters of the IPO methods affect the choice between IPOs and acquisitions. We show that for both the IPO methods, the probability of choosing IPOs decrease when cost to investors for acquiring information increases and fixed entry cost for investors increases. In the case of book building, we show that the probability of choosing IPOs decreases when the number of informed investors in the road-show increases. In the case of auctions, we show that the probability of choosing IPOs decreases when the certainty of the auction being successful decreases and the number of potential bidders increases. We analyse these extensions in two cases: when the firm is controlled by the entrepreneur and when the firm is controlled by the private equity investor. We also discuss important empirical implications which arise out of our theoretical model.

This article may be used for non-commercial purposes in accordance with Wiley Terms and Conditions for Self-Archiving * This version of the article has been accepted for publication and undergone full peer review but has not been through the copyediting, typesetting, pagination and proofreading process, which may lead to differences between this version and the publisher's final version AKA Version of Record.

Evidence suggests that IPO firms have negative returns and declining growth opportunities in the years post listing. We explore whether lockup type influences such returns and growth opportunities. Specifically, we investigate long run returns and growth opportunities of mandatory and non-mandatory lockup firms. We find that long run returns (growth opportunities) for mandatory lockup firms are significantly lower (higher) than for nonmandatory lockup firms. Examining the influence of corporate governance on these associations, we find that good corporate governance is positively associated with long run returns for both lockup type firms, with the differential effect insignificant. We also find that the listing survival rate of mandatory lockup firms is higher than for nonmandatory lockup firms. Further analysis reveals that the incremental effect of smaller firm size on higher growth opportunities is stronger for mandatory lockup firms relative to nonmandatory lockup firms.

Performance of IPO stocks depicts two anomalies: initial underpricing and long run underperformance. A plethora of studies have established the causes of these IPO puzzle to include information asymmetry, institutional ownership, IPO size, market volatility, the intrinsic value of the IPO and issue characteristics among others. None of these studies on IPO performance as far as research has shown considered moderating effect of automation of securities market on firm specific factors. Kenya’s equity market capitalization has been on a downward trend being surpassed by fixed income securities. IPO stocks performance offer long-term as well as short-term capital to companies. This study attempts to establish whether there is a nexus between NSE automation and firm specific factors regarding performance of IPO stocks at NSE. Longitudinal and descriptive study designs were used on the secondary panel data. Multiple linear regression was used to analyze the data with Stata statistical so...

The purpose of this paper is to investigate some factors influencing the underpricing of initial public offerings (IPOs). The intention is to determine whether IPO firms-particularly those in certain firms of the market where information asymmetry is likely to be greatest can benefit from significantly better IPO pricing by engaging the services of differentiated reputation parties. The paper examines a broad sample of initial public offerings made between 2014-2017. It also conducts multivariate tests to assess the influence of percentage of stock offer, industry specialization, Auditor reputation and underwriter reputation on IPO underpricing. The paper finds that IPOs audited by big 4 firms and underwriter reputation experience affect significantly negative on underpricing but Industry specialization and percentage of stock offer don't influence at all. The results in this paper may not be generalizable to different countries. They do, however, appear to be robust in Indonesia throughout the four-year sample period. The paper shows that it may not be feasible for all clients in certain firms of the market. However, if they can the results suggest that they could benefit from better IPO pricing.

The stock market reacts differently to various factors ranging from economic, political and socio-cultural. The stock prices of quoted companies in Kenya are affected either positively or negatively by a number of factors occurring within or without the economic system. These prompted the researcher to investigate the effect of dividend per share on share prices after the initial public offer (IPO) for quoted companies in Kenya. The study specifically focused on investigating the effect of ex p ec ted fu ture ea rn ing s on share prices after an IPO, investigating the effect of level of growth rate on share prices after an IPO and investigating the effect of earnings news on share prices after an IPO. The study was conducted through a descriptive survey design whereby data was gathered from secondary sources through thorough examination of financial performance records of the quoted companies listed at Nairobi Security exchange. The data was then analyzed and evaluated for usefulnes...

Using a hand-collected data set of private firm acquisitions and IPOs, this paper develops the first empirical analysis in the literature of the "IPO valuation premium puzzle," which refers to a situation where many private firms choose to be acquired rather than to go public at higher valuations. We also test several new hypotheses regarding a private firm's choice between IPOs and acquisitions. Our analysis of private firm valuations in IPOs and acquisitions indicates that IPO valuation premia disappear for larger VC backed firms after controlling for various observable factors affecting a firm's propensity to choose IPOs over acquisitions. Further, after controlling for the long-run component of the expected payoff to firm insiders from an IPO exit, we find that the IPO valuation premium vanishes even for larger non-VC backed firms and shrinks substantially for smaller firms as well. Our Heckman-style treatment effects regression analysis demonstrates that the above results are robust to controlling for the selection of exit mechanism by firm insiders based on unobservables. Our findings on private firms' choice between IPOs and acquisitions can be summarized as follows. First, firms operating in industries characterized by the absence of a dominant market player (and therefore more viable against product market competition) are more likely to go public rather than to be acquired. Second, more capital intensive firms, those operating in industries characterized by greater private benefits of control, and those which are harder to value by IPO market investors are more likely to go public rather than to be acquired. Third, the likelihood of an IPO over an acquisition is greater for venture backed firms and those characterized by higher pre-exit sales growth.

This paper examines the financial performance of Malaysian initial public offerings Ž. IPOs during the period 1980-1995. The major focus of the study is on the role of management earnings forecasts and underwriters in the valuation of IPOs. The results suggest extremely high and statistically significant initial premiums and positive and statistically significant long-term returns up to 3 years after listing. The findings for long-term returns contradict the consensus of the IPO literature that documents a significant negative long-term performance. Our results indicate a negative association of upward bias in management earnings forecasts with IPOs' performance during the first 12 months after the IPOs.