IPOS LONG-RUN PERFORMANCES,MERGER AND ACQUISITION, AND PRIVATE EQUITY
Abstract
Analyzing 918 initial public offering (IPO) firmson the NASDAQ and NYSE over the period of1999 to 2013,we examine an impact of acquisition on long-run stock performancesby conducting the event-time approach. The results show that IPO firms that make an acquisition within their first year after going public significantly underperform than the other firms that do not engage an acquisition in their first year. However, if acquisition activities are delayed to years two or three, the performance of the acquiring firmsturns to be better than their associated non-acquiring firms. Moreover, private equity supports both acquiring and nonacquiring IPOs stock performance.
Keyword : Initial public offering, Merger and acquisition, Private equity, Performance
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