Market performance of US-listed Shipping IPOs

Andreas Merikas, Dimitrios Gounopoulos and Chrysoula Karli
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Andreas Merikas: Department of Shipping, University of Piraeus, Piraeus 18532, Greece. E-mails: merikas@otenet.gr; msx1ck@surrey.ac.uk
Chrysoula Karli: Department of Shipping, University of Piraeus, Piraeus 18532, Greece. E-mails: merikas@otenet.gr; msx1ck@surrey.ac.uk

Maritime Economics & Logistics, 2010, vol. 12, issue 1, 36-64

Abstract: This article empirically analyses the initial and aftermarket returns for US-listed Shipping initial public offerings (IPOs). Our main objective is to fulfil the great need for the US Shipping evidence on long-run performance of IPOs. We aim to test the extent to which signalling models explain the reasons for the issuance of IPOs using the long-term price performance approach. We concentrate on a sample of 61 IPOs listed during the period 1987–2007 in four major US Stock Exchanges, computing buy-and-hold abnormal returns (BHARs) and cumulative average returns (CARs). The results show that US-listed Shipping IPOs are underpriced on initial trading day on average by only 4.44 per cent, a figure that indicates an outstanding level of maturity for the shipping sector. In the long run, Shipping IPOs listed in the United States offer 1- , 2- and 3-year holding period returns (BHAR) of 7.50, 7.73 and 3.26 per cent, respectively. The conclusion suggested by those results is that investing in the United States is not a guaranteed investment for long-term Shipping IPOs-oriented investors.

Date: 2010
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