The Rise and Fall and Rise Again of the United States IPOS

Arvin Ghosh

Global Journal of Business Research, 2007, vol. 1, issue 1, 11-23

Abstract: Initial Public Offerings (IPOs) of securities are among the most significant phenomena in the United States stock markets in recent years. In the so-called New Economy of the 1990’s, IPO’s ushered in the information technology revolution of the world. In this paper, the rise and fall of IPOs in the United States during 1990-2001 are examined. During 1996-2000, the first-day return of NYSE from 1996-2000 are found to be IPOs was on average 11.97%, while for the NASDAQ IPOs, were 63.33%, and for Internet IPOs it was a whopping 90.28%, resulting in first-day return for all IPOs of 15.24%. But the one-year return for all IPOs was a very modest 3.23%, and for the NASDAQ IPOs, it was only 11.49%. The regression results show consistently positive association between the first-day closing price and the return statistics. Finally, the paper discusses the ten recent trends that have become evident since the revival of the IPO market in the United States in 2004.

Date: 2007
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