The new issues puzzle revisited: The role of firm quality in explaining IPO returns

Magnus Blomkvist; Timo Korkeamäki; John Pettersson

doi:10.1016/j.econlet.2017.07.022

The new issues puzzle revisited: The role of firm quality in explaining IPO returns

Magnus Blomkvist^*, Timo Korkeamäki, John Pettersson

^*Corresponding author for this work

Not published at Aalto University

Research output: Contribution to journal › Article › Scientific › peer-review

1 Citation (Scopus)

Abstract

We study the risk and return characteristics of IPOs for up to 60 months. After controlling for Asness et al. (2014) quality minus junk factor, IPOs outperform the benchmark portfolios. The previously-documented negative abnormal IPO returns may derive from inaccurate benchmarks.

Original language	English
Pages (from-to)	88-91
Number of pages	4
Journal	Economics Letters
Volume	159
DOIs	https://doi.org/10.1016/j.econlet.2017.07.022
Publication status	Published - 1 Oct 2017
MoE publication type	A1 Journal article-refereed

Keywords

Firm quality
IPOs
Long-run performance

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10.1016/j.econlet.2017.07.022

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title = "The new issues puzzle revisited: The role of firm quality in explaining IPO returns",

abstract = "We study the risk and return characteristics of IPOs for up to 60 months. After controlling for Asness et al. (2014) quality minus junk factor, IPOs outperform the benchmark portfolios. The previously-documented negative abnormal IPO returns may derive from inaccurate benchmarks.",

keywords = "Firm quality, IPOs, Long-run performance",

author = "Magnus Blomkvist and Timo Korkeam{\"a}ki and John Pettersson",

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AU - Pettersson, John

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AB - We study the risk and return characteristics of IPOs for up to 60 months. After controlling for Asness et al. (2014) quality minus junk factor, IPOs outperform the benchmark portfolios. The previously-documented negative abnormal IPO returns may derive from inaccurate benchmarks.

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KW - Long-run performance

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DO - 10.1016/j.econlet.2017.07.022

M3 - Article

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SN - 0165-1765

VL - 159

SP - 88

EP - 91

JO - Economics Letters

JF - Economics Letters

ER -

The new issues puzzle revisited: The role of firm quality in explaining IPO returns

Abstract

Keywords

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