BEHAVIORS OF COMPANIES AFTER INITIAL PUBLIC OFFERING THE CASE OF TURKEY

Ercan Ozen
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Ercan Ozen: University of Usak, Turkey

Eurasian Journal of Economics and Finance, 2016, vol. 4, issue 4, 20-28

Abstract: Companies that went public have some aims such as finding fund for their new investments and being more recognized. On the other hand, investors have some purposes in the market for instance getting dividend and capital earnings. After the initial public offering (IPO), some companies show good performance while the others have lower performance, and so it causes loss for investors. In the process of IPO, companies announce their future strategies to the investors. This study aims to determine companies’ performances after IPO and whether they could be able to fulfill their strategies and plans as they promised before. Therefore, nonfinancial companies which went public between 2006 and 2012 are analyzed. The data is obtained from prospectus and financial statements of these companies. The results of the analysis show that the companies which perform activities according to their plans become successful and maintain their profitability. Thus, this causes positive effects on stock prices of these companies. On the other hand, other companies which could not be able to fulfill their plans have lower profitability. Their stock prices were affected negatively and this lead to investors’ lost. The results of the study emphasizes that it is necessary to ensure a balance between both companies and investor benefits.

Keywords: Initial Public Offering; Borsa Istanbul; Company; Profit; Investor Right (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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