- Copyright Page
- The Law and Economics of the Going-Public Decision
- IPO Regulators Gone Wild
- Determinants of Variation in IPO Underpricing
- IPO Valuation: The International Evidence
- Survey and Synthesis of the IPO Underpricing Literature: The Fixed-Offer Price Constraint as a Unifying Core Explanation
- IPO Market Conditions and Timing over the Long Run
- The Interplay of IPO and M&A Markets: The Many Ways That One Affects the Other
- Lower Visibility Platforms Serving as Stepping Stones to National Stock Exchanges: The Case of Shell Reverse Mergers
- Going Public in China: Reverse Mergers versus IPOs on Chinese Markets
- Specified Purpose Acquisition Company IPOs
- The Impact of IPOs’ Analyst Coverage on the Choice and Timing of SEOs: A Survival Analysis
- Auditor Selection and IPO Underpricing
- The Structure and Role of the Underwriting Syndicate
- Venture Capital and Financial Reporting in Newly Public Firms
- The Dark Side of Venture Capital Syndication and IPO Firm Performance: The Impact of Different Institutional Environments
- All Ties Are Not Created Equal: Institutional Equity Ties, IPO Performance, and Market Growth of New Ventures
- Is Exchange Regulation Effective for Junior Public Equity Markets?
- Corporate Governance in European IPOs
- Survival of Initial Public Offerings on Europe’s New Stock Markets
- Initial Public Offerings in Germany between 1997 and 2015
- The Underpricing of Initial Public Offerings and Private Placements of Equity in China
- IPOs in New Zealand: An Analysis of Benchmark-Adjusted Performance
- Initial Public Offerings in Hong Kong
- The Admission and Regulation of Overseas Issuers: A Survey of the Top Four Financial Centers
- IPOs in a Major Emerging Market Economy—India
- Private Capital Marketplaces and IPOs
- Crowdfunding: Business and Regulatory Perspective
- Regulatory Arbitrage in Cross-Border Crowdfunding
Abstract and Keywords
This chapter examines the performance of 96 initial public offerings (IPOs) listed on New Zealand Stock Exchange (NZSX) during the 25-year period from July 1991 to June 2015. The NZX Gross All Index and two portfolios of matched peers based on sector/industry and either sales forecast or book-to-market ratio are constructed as benchmarks. Compared with three benchmark portfolios, IPO firms outperform in the short term (one year) but underperform in the medium- and long-term investment horizons (three to five years). The authors conduct three subsample analyses to examine the association between differences in valuation multiples (E/P, EBITDA/EV, and P/S) and long-term returns. The findings are consistent with the general consensus of superior returns from value investments: IPOs with above-median earnings ratio (E/P and EBITDA/EV) and below-median P/S exhibit higher cumulative average return (CAR) than IPOs with below-median earnings ratio and above-median P/S.
Huong Dang is Senior Lecturer at University of Canterbury Business School.
Michael Jolly is Analyst in Investment Banking at Forsyth Barr.
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