The New Stock that Did Not Underperform

Bader S. Alhashel

Emerging Markets Finance and Trade, 2018, vol. 54, issue 12, 2765-2777

Abstract: This article examines the performance of newly listed stocks in a unique setting in which firms do not issue new equity immediately prior to listing. We find that in such a setting newly listed firms do not observe any underperformance over a three-year period as documented in the extant literature. This result is arrived at after controlling for both size and book-to-market effects using both event-time and calendar-time approaches. These findings present a challenge to the current extant empirical evidence and to the pseudo market timing and fads hypotheses.

Date: 2018
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DOI: 10.1080/1540496X.2017.1410472

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