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Long-run Performance (long-run + performance)

Distribution by Scientific Domains

Business, Economics, Finance and Accounting	100%

Selected Abstracts

The Disparate Nature of Targeted Repurchases: Evidence from Long-Run Performance

JOURNAL OF BUSINESS FINANCE & ACCOUNTING, Issue 1-2 2007
Saeyoung Chang
Abstract:, We examine the announcement stock returns and long-run performance of 352 targeted repurchases from 1979 to 1998. For those repurchases of blocks that are non-control related we find a positive announcement stock price response and positive long-run stock performance indicating that these repurchases are timed to occur when the company's shares are undervalued and that the market underreacts to this signal. In contrast, for those repurchases of blocks that are control related we find a negative announcement stock price response and insignificant long-run stock performance indicating that these repurchases occur for a different reason. We conclude that control related repurchases are utilized solely to dismiss potential takeover bids and are not timed when the stock is undervalued. [source]

Corporate Investment and Asset Price Dynamics: Implications for SEO Event Studies and Long-Run Performance

THE JOURNAL OF FINANCE, Issue 3 2006
MURRAY CARLSON
ABSTRACT We present a rational theory of SEOs that explains a pre-issuance price run-up, a negative announcement effect, and long-run post-issuance underperformance. When SEOs finance investment in a real options framework, expected returns decrease endogenously because growth options are converted into assets in place. Regardless of their risk, the new assets are less risky than the options they replace. Although both size and book-to-market effects are present, standard matching procedures fail to fully capture the dynamics of risk and expected return. We calibrate the model and show that it closely matches the primary features of SEO return dynamics. [source]

The IPO Derby: Are There Consistent Losers and Winners on This Track?

FINANCIAL MANAGEMENT, Issue 1 2008
Konan Chan
We examine the individual and joint relation of discretionary accounting accruals, underwriter reputation, and venture capital backing with the long-run performance of initial public offerings (IPOs). We find that although correlated to some extent, these variables do not manifest the same underlying phenomena in their relation to IPOs' performance. The confluence of the variables is more important than using any one of them individually to identify IPOs that exhibit abnormal long-run stock returns. The combination of their negative aspects helps identify extreme underperformers. We also identify a set of winner IPOs by combining the positive aspects of the three variables. [source]

Underwriter reputation, earnings management and the long-run performance of initial public offerings

ACCOUNTING & FINANCE, Issue 1 2010
Shao-Chi Chang
M41; G14; G24; G32 Abstract This study contributes to the extant literature on the nature of earnings management surrounding initial public offerings (IPOs) by investigating the role of underwriter reputation. We argue that prestigious underwriters will protect their reputation by carefully monitoring and certifying financial information on IPO firms, thereby limiting any potential earnings manipulation. As a result, those IPO firms that are associated with more prestigious underwriters are likely to exhibit substantially less-aggressive earnings management. Conversely, we find the existence of a negative relationship between earnings management and the post-offer performance of an IPO firm's stocks only for those firms associated with less-prestigious underwriters. [source]

Industry Clustering in Nordic Initial Public Offering Markets

INTERNATIONAL REVIEW OF FINANCE, Issue 1-2 2006
P. Joakim Westerholm
ABSTRACT We present institutional features of the Nordic initial public offering (IPO) markets and relate initial return, long-run performance and size of companies listed during 1991,2002 to industry clustering and level of listing requirements. High industry clustering is related to higher initial return and lower long-run performance supporting our prediction that information asymmetry has an impact on initial underpricing while temporary overvaluation affects long-run performance. The relatively high listing requirements and targeting of the main market have not protected the Nordic IPOs from poor long-run performance. On two markets, Norway and Denmark, IPOs outperform the all share market index. [source]

Do Expert Informational Intermediaries Add Value?

JOURNAL OF ACCOUNTING RESEARCH, Issue 4 2003
Evidence from Auditors in Microcap Initial Public Offerings
Do expert informational intermediaries add value? We address this question by examining the informativeness of the audit report contained in the prospectus associated with a firm's initial public offering (IPO). At the time of the IPO, there is a relative lack of information to facilitate the establishment of equity values, suggesting that the information provided by outside "experts" (e.g., auditors, underwriters) is particularly important. In this article we study small, non-venture-backed IPOs, a segment of the market with the poorest long-run performance and where the prestigious audit firm is often the sole (if any) expert present. We find that the pre-IPO opinions of larger auditors are more predictive of post-IPO negative stock delistings. Of particular note, the opinions of the national-tiered firms are comparably predictive to those of the Big 6, though this finding emerges only after we consider the selectivity-based differences in the clients that hire these national firms. Our findings also indicate that, for larger auditors the presence of a pre-IPO going-concern opinion is more strongly associated with first-year stock returns and that larger auditors are more likely to give such opinions to their distressed clients. Overall, we address a deficiency in the literature relating to "the paucity of evidence on the value of auditor opinions to investors" (Healy and Palepu [ 2001 p. 415]). [source]

The Disparate Nature of Targeted Repurchases: Evidence from Long-Run Performance

INVESTORS ADJUST EXPECTATIONS AROUND SELL-SIDE ANALYST REVISIONS IN IPO RECOMMENDATIONS

THE JOURNAL OF FINANCIAL RESEARCH, Issue 1 2009
Deepika Bagchee
Abstract In this article I compare investor response to sell-side analyst recommendation revisions of initial public offering (IPO) firms in the first three years after issue with that of a benchmark control sample of firms that have been public longer. I test whether investors in IPO firms adjust their initially optimistic expectations as information about new issues is released and uncertainty is resolved. In support of my hypothesis that investors adjust expectations downward, I find abnormally negative returns around analyst revisions of IPO firm recommendations. Additionally, I find the effect of analyst revisions on long-run performance of IPO firms is economically significant. [source]