NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Really Long-Run Performance of Initial Public Offerings: The Pre-NASDAQ Evidence

Paul A. Gompers, Josh Lerner

NBER Working Paper No. 8505
Issued in October 2001
NBER Program(s):   CF

Financial economists in recent years have closely examined and intensely debated the performance of initial public offerings using data after the formation of NASDAQ. The paper seeks to shed light on this controversy by undertaking a large, out-of-sample study: we examine the performance for up to five years after listing of nearly 3,661 initial public offerings in the United States from 1935 to 1972. The sample displays some evidence of underperformance when event-time buy-and-hold abnormal returns are used. The underperformance disappears, however, when cumulative abnormal returns are utilized. A calendar-time analysis also shows that over the entire sample period i.e., from 1935 to 1976 IPOs return as much as the market. Finally, the intercepts in CAPM and Fama-French three-factor regressions are insignificantly different from zero suggesting no abnormal performance.

download in pdf format
   (1055 K)

email paper

This paper is available as PDF (1055 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w8505

Published: Journal of Finance, 58 (August 2003) 1355-1392. citation courtesy of

Users who downloaded this paper also downloaded these:
Gompers, Kovner, Lerner, and Scharfstein w11385 Venture Capital Investment Cycles: The Impact of Public Markets
Aggarwal, Prabhala, and Puri w9070 Institutional Allocation In Initial Public Offerings: Empirical Evidence
Schwert w8436 Stock Volatility in the New Millennium: How Wacky Is Nasdaq?
Lowry, Officer, and Schwert w12295 The Variability of IPO Initial Returns
Pastor and Veronesi w10581 Was There a Nasdaq Bubble in the Late 1990s?
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us