Do IPOs outperform Treasury bills?

Gow-Cheng Huang, Kartono Liano and Ming-Shiun Pan

Finance Research Letters, 2022, vol. 47, issue PA

Abstract: The majority of stocks that went public during 1975–2020 do not outperform one-month T-bills. Only 38.65% of the IPOs have a lifetime buy-and-hold return higher than T-bills. In terms of creating wealth for shareholders, the top 365 performing IPO firms (3.23% of the total) account for 100% of the total net wealth creation. The remaining 10,947 IPO firms (96.77%) collectively earn the risk-free rate in their lifetimes. Consequently, the wealth creation in the IPO market is highly concentrated in relatively few top-performing IPO firms.

Keywords: IPO performance; Treasury bills; Shareholder wealth (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1544612321005481
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:47:y:2022:i:pa:s1544612321005481

DOI: 10.1016/j.frl.2021.102610

Access Statistics for this article

Finance Research Letters is currently edited by R. Gençay

More articles in Finance Research Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().