IPO patterns in Euronext after the global financial crisis of 2007-2008

Nuno Silva, Helder Sebastião and Diogo Henriques
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Diogo Henriques: University of Coimbra, Faculty of Economics
Authors registered in the RePEc Author Service: Nuno Miguel Barateiro Gonçalves Silva

No 2020-15, CeBER Working Papers from Centre for Business and Economics Research (CeBER), University of Coimbra

Abstract: This paper investigates the pricing patterns of 161 IPOs that occurred in 2009-2017 in the Euronext markets of Amsterdam, Brussels, Lisbon, and Paris. Across all the IPOs, we find a first-day raw return of 1.4% and an industry-adjusted return of 1.2%. After one year, the average raw returns are slightly higher, around 4.5%, and the average adjusted returns are negative, around -2.7%. These first-day returns are lower whilst long-run returns are higher than those reported in other studies, most notably in those that use periods that overlap our sample Healthcare is the industry that presents a higher initial underpricing (2.3% industry-adjusted return), whilst the Technology industry presents the higher year underperformance (-29.5% industry-adjusted return). Mainly, results are in line with the market conditions and investor sentiment hypotheses according to which, when market conditions are bad (crises), uninformed investors are not so active and optimistic in the IPO market, hence initial underpricing and subsequent underperformance tend to be lower.

Keywords: IPO; Euronext; underpricing; market conditions; investor sentiment (search for similar items in EconPapers)
JEL-codes: G12 G14 G24 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2020-07
New Economics Papers: this item is included in nep-cfn
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Related works:
Journal Article: IPO Patterns in Euronext After the Global Financial Crisis of 2007-2008 (2021)
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