Chapter 17: Acquisitions, SEOs, divestitures and IPO performance
Since the early 1990s, when Ritter (1991) first documented the aftermarket under performance of initial public offerings (IPOs), a considerable amount of empirical research across many countries has corroborated his findings and highlighted some significant differences in performance across different types of IPOs. Post-event market underperformance, however, is not a unique feature of IPOs. A number of studies, for example, report that firms with seasoned equity offerings (SEOs) underperform in comparison to similar non-issuing firms in the three-year period following the issue (Loughran and Ritter, 1995; Spiess and Affleck-Graves, 1995; Iqbal et al., 2006). Furthermore, despite the positive initial returns for firms announcing acquisitions, there is considerable evidence suggesting negative post-event performance at least for stock-financed acquisitions (Loughran and Vijh, 1997; Rau and Vermaelen, 1998; Wiggenhorn et al., 2007).
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.