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MEASURING IPO PERFORMANCE THROUGH INDUSTRY-ADJUSTED MODELS

Yıl 2020, Cilt: 12 Sayı: 23, 639 - 652, 31.07.2020

Lokman Tütüncü Veysel Uzunel

https://doi.org/10.14784/marufacd.785864

Öz

We investigate operating performance of Turkish IPOs between January 2010 and December 2017 through well-specified industry- and performance-adjusted models advocated by Barber and Lyon (1996). We find that issuers underperform matched peers in the long-run regardless of the choice of model. Any improvement in performance is either temporary or precedes the issue. We conclude that performance improvements observed around the issue do not extend to long-term, because better profitability could point to earnings management which leads to earnings reversal, while improvements in leverage and liquidity end when proceeds are exhausted.

Anahtar Kelimeler

Initial public offerings financial performance operating performance

Kaynakça

  • ALLEN, Franklin - FAULHABER, Gerald R. (1989). “Signaling by underpricing in the IPO market”, Journal of Financial Economics, 23(2), 303-324.
  • BARBER, Brad M. - LYON, John D. (1996). “Detecting abnormal operating performance: The empirical power and specification of test statistics”, Journal of Financial Economics, 41(3), 359-399.
  • BENNINGA, Simon - HELMANTEL, Mark - SARIG, Oded. (2005). “The timing of initial public offerings”, Journal of Financial Economics, 75(1), 115-132.
  • BILDIK, Recep - YILMAZ, Mustafa K. (2008). “The Market Performance of Initial Public Offerings in the Istanbul Stock Exchange”, BDDK Bankacılık ve Finansal Piyasalar, 2(2), 49-75.
  • BRAV, Alon - GOMPERS, Paul A. (2003). “The role of lockups in initial public offerings”, Review of Financial Studies, 16(1), 1-29.
  • CELIK, Melike K. (2016). “Evaluation of post-IPO operating performance of firms: evidence from Borsa Istanbul”, International Journal of Management Economics and Business, 12(27), 267-282.
  • CHI, Jing - PADGETT, Carol. (2006). “Operating performance and its relationship to market performance of Chinese Initial Public Offerings”, Chinese Economy, 39(5), 28-50.
  • DURUKAN, M. B. (2002). “The relationship between IPO returns and factors influencing IPO performance: case study of the Istanbul Stock Exchange”, Managerial Finance, 28(2), 18-38.
  • FIELD, Laura C. - HANKA, Gordon. (2001). “The expiration of IPO share lockups”, Journal of Finance, 56(2), 471-500.
  • JAIN, Bharat A. - KINI, Omesh. (1994). “The post-issue operating performance of IPO firms”, Journal of Finance, 49(5), 1699-1726.
  • IBBOTSON, Roger G. (1975). “Price performance of common stock new issues”, Journal of Financial Economics, 2(3), 235-272.
  • KIM, Moonchul - RITTER, Jay R. (1999). “Valuing IPOs”, Journal of Financial Economics, 53(3), 409–437.
  • KIYMAZ, Halil. (2000). “The initial and aftermarket performance of IPOs in an emerging market: evidence from Istanbul Stock Exchange”, Journal of Multinational Financial Management, 10(2), 213-227.
  • KURTARAN, Ahmet - ER, Bunyamin. (2008). “The post-issue operating performance of IPOs in an emerging market: evidence from Istanbul Stock Exchange”, Investment Management and Financial Innovations, 5(4), 50-62.
  • LOUGHRAN, Tim - RITTER, Jay R. (2002). “Why don't issuers get upset about leaving money on the table in IPOs?” Review of Financial Studies, 15(2), 413-443.
  • LOUGHRAN, Tim - RITTER, Jay R. - RYDQVIST, Kristian. (1994). “Initial public offerings: International insights”, Pacific-Basin Finance Journal, 2(2-3), 165-199.
  • LYON, John D. - BARBER, Brad M. - TSAI, Chih-Ling. (1999). “Improved methods for tests of abnormal long-run stock returns”, Journal of Finance, 54(1), 165-201.
  • MACKINLAY, Craig A. (1997). “Event studies in economics and finance”, Journal of Economic Literature, 35(1), 13-39.
  • MIKKELSON, Wayne H. - PARTCH, Megan M. - SHAH, Kshitij. (1997). “Ownership and operating performance of companies that go public”, Financial Economics, 44(3), 281-307.
  • MILLER, Edward M. (1977). “Risk, uncertainty, and divergence of opinion”, Journal of Finance, 32(4), 151-1168.
  • RITTER, Jay R. (1984). “The ‘Hot Issue’ market of 1980”, Journal of Business, 57(2), 215–240.
  • RITTER, Jay R. (1991). “The long-run performance of initial public offerings”, Journal of Finance, 46(1), 3-28.
  • RITTER, Jay R. and WELCH, Ivo. (2002). “A review of IPO activity, pricing and allocations”, Journal of Finance, 57(4), 1795–1828.
  • ROOSENBOOM, Peter. (2012). “Valuing and pricing of IPOs”, Journal of Banking and Finance, 36(6), 1653-1664.
  • SCHULTZ, Paul. (2003). “Pseudo market timing and long-run underperformance of IPOs”, Journal of Finance, 58(2), 483-517.
  • TEOH, Siew H. - WELCH, Ivo - WONG, T. J. (1998). “Earnings management and the long-run market performance of initial public offerings”, Journal of Finance, 53(6), 1935-1974.

MEASURING IPO PERFORMANCE THROUGH INDUSTRY-ADJUSTED MODELS

Yıl 2020, Cilt: 12 Sayı: 23, 639 - 652, 31.07.2020

Lokman Tütüncü Veysel Uzunel

https://doi.org/10.14784/marufacd.785864

Öz

We investigate operating performance of Turkish IPOs between January 2010 and December 2017 through well-specified industry- and performance-adjusted models advocated by Barber and Lyon (1996). We find that issuers underperform matched peers in the long-run regardless of the choice of model. Any improvement in performance is either temporary or precedes the issue. We conclude that performance improvements observed around the issue do not extend to long-term, because better profitability could point to earnings management which leads to earnings reversal, while improvements in leverage and liquidity end when proceeds are exhausted

Anahtar Kelimeler

Initial public offerings financial performance operating performance

Kaynakça

  • ALLEN, Franklin - FAULHABER, Gerald R. (1989). “Signaling by underpricing in the IPO market”, Journal of Financial Economics, 23(2), 303-324.
  • BARBER, Brad M. - LYON, John D. (1996). “Detecting abnormal operating performance: The empirical power and specification of test statistics”, Journal of Financial Economics, 41(3), 359-399.
  • BENNINGA, Simon - HELMANTEL, Mark - SARIG, Oded. (2005). “The timing of initial public offerings”, Journal of Financial Economics, 75(1), 115-132.
  • BILDIK, Recep - YILMAZ, Mustafa K. (2008). “The Market Performance of Initial Public Offerings in the Istanbul Stock Exchange”, BDDK Bankacılık ve Finansal Piyasalar, 2(2), 49-75.
  • BRAV, Alon - GOMPERS, Paul A. (2003). “The role of lockups in initial public offerings”, Review of Financial Studies, 16(1), 1-29.
  • CELIK, Melike K. (2016). “Evaluation of post-IPO operating performance of firms: evidence from Borsa Istanbul”, International Journal of Management Economics and Business, 12(27), 267-282.
  • CHI, Jing - PADGETT, Carol. (2006). “Operating performance and its relationship to market performance of Chinese Initial Public Offerings”, Chinese Economy, 39(5), 28-50.
  • DURUKAN, M. B. (2002). “The relationship between IPO returns and factors influencing IPO performance: case study of the Istanbul Stock Exchange”, Managerial Finance, 28(2), 18-38.
  • FIELD, Laura C. - HANKA, Gordon. (2001). “The expiration of IPO share lockups”, Journal of Finance, 56(2), 471-500.
  • JAIN, Bharat A. - KINI, Omesh. (1994). “The post-issue operating performance of IPO firms”, Journal of Finance, 49(5), 1699-1726.
  • IBBOTSON, Roger G. (1975). “Price performance of common stock new issues”, Journal of Financial Economics, 2(3), 235-272.
  • KIM, Moonchul - RITTER, Jay R. (1999). “Valuing IPOs”, Journal of Financial Economics, 53(3), 409–437.
  • KIYMAZ, Halil. (2000). “The initial and aftermarket performance of IPOs in an emerging market: evidence from Istanbul Stock Exchange”, Journal of Multinational Financial Management, 10(2), 213-227.
  • KURTARAN, Ahmet - ER, Bunyamin. (2008). “The post-issue operating performance of IPOs in an emerging market: evidence from Istanbul Stock Exchange”, Investment Management and Financial Innovations, 5(4), 50-62.
  • LOUGHRAN, Tim - RITTER, Jay R. (2002). “Why don't issuers get upset about leaving money on the table in IPOs?” Review of Financial Studies, 15(2), 413-443.
  • LOUGHRAN, Tim - RITTER, Jay R. - RYDQVIST, Kristian. (1994). “Initial public offerings: International insights”, Pacific-Basin Finance Journal, 2(2-3), 165-199.
  • LYON, John D. - BARBER, Brad M. - TSAI, Chih-Ling. (1999). “Improved methods for tests of abnormal long-run stock returns”, Journal of Finance, 54(1), 165-201.
  • MACKINLAY, Craig A. (1997). “Event studies in economics and finance”, Journal of Economic Literature, 35(1), 13-39.
  • MIKKELSON, Wayne H. - PARTCH, Megan M. - SHAH, Kshitij. (1997). “Ownership and operating performance of companies that go public”, Financial Economics, 44(3), 281-307.
  • MILLER, Edward M. (1977). “Risk, uncertainty, and divergence of opinion”, Journal of Finance, 32(4), 151-1168.
  • RITTER, Jay R. (1984). “The ‘Hot Issue’ market of 1980”, Journal of Business, 57(2), 215–240.
  • RITTER, Jay R. (1991). “The long-run performance of initial public offerings”, Journal of Finance, 46(1), 3-28.
  • RITTER, Jay R. and WELCH, Ivo. (2002). “A review of IPO activity, pricing and allocations”, Journal of Finance, 57(4), 1795–1828.
  • ROOSENBOOM, Peter. (2012). “Valuing and pricing of IPOs”, Journal of Banking and Finance, 36(6), 1653-1664.
  • SCHULTZ, Paul. (2003). “Pseudo market timing and long-run underperformance of IPOs”, Journal of Finance, 58(2), 483-517.
  • TEOH, Siew H. - WELCH, Ivo - WONG, T. J. (1998). “Earnings management and the long-run market performance of initial public offerings”, Journal of Finance, 53(6), 1935-1974.
Toplam 26 adet kaynakça vardır.

Ayrıntılar

Birincil Dil İngilizce
Bölüm Makaleler
Yazarlar

Lokman Tütüncü

Veysel Uzunel Bu kişi benim

Yayımlanma Tarihi 31 Temmuz 2020
Gönderilme Tarihi 17 Şubat 2020
Yayımlandığı Sayı Yıl 2020 Cilt: 12 Sayı: 23

Kaynak Göster

APA Tütüncü, L., & Uzunel, V. (2020). MEASURING IPO PERFORMANCE THROUGH INDUSTRY-ADJUSTED MODELS. Finansal Araştırmalar Ve Çalışmalar Dergisi, 12(23), 639-652. https://doi.org/10.14784/marufacd.785864