On post-IPO stock price performance: A comparative analysis of RLBOs and IPOs

Sudip Datta, Mark Gruskin and Mai Iskandar-Datta

Journal of Banking & Finance, 2015, vol. 55, issue C, 187-203

Abstract: This is the first study to examine the post-IPO stock price performance by differentiating between IPOs and three types of RLBOs (i.e. public-to-private (or re-IPOs), division-to-private, and private-to-private deals). We document that public-to-private RLBOs outperform their industry rivals, IPOs, mature firms in comparable industries, and a propensity-score matched control group for up to five years post-offering. Further, we document that, within RLBOs, public-to-private RLBOs, outperform private-to-private and division-to-private RLBOs. We also find support for the underwriter signaling effect for public-to-private RLBOs. Our analysis identifies for the first time what private period restructuring activities contribute to superior post-re-IPO stock price performance. Further, the beneficial effects of private period restructurings are enhanced for deals associated with prestigious underwriters. Our findings suggest that first IPOs and re-IPOs differ substantially in term of post-offer performance, the impact of prestigious underwriters on performance, and performance over time.

Keywords: Post-RLBO performance; Difference between public-to-private (re-IPOs); Division-to-private; Private-to-private RLBO and IPO performance; Underwriter signaling; Private period restructuring (search for similar items in EconPapers)
JEL-codes: G30 G32 G34 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:55:y:2015:i:c:p:187-203

DOI: 10.1016/j.jbankfin.2015.02.020

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