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Keywords:

  • initial public offerings;
  • long-term performance;
  • market efficiency
  • G14;
  • G32;
  • G24

Abstract

We analyse the long-run performance of 254 Greek IPOs that were listed during the period 1994–2002, computing buy-and-hold abnormal returns (BHAR) and cumulative abnormal returns (CAR) over 36 months of secondary market performance. The empirical results differ from international evidence and reveal long-term overperformance that continues for a substantial interval after listing. Measuring these returns in calendar time, we find statistical significance with several of the benchmarks employed. We also find that long-term overperformance is a feature of the mass of IPOs conducted during a pronounced IPO wave. Cross-sectional regressions of long-run performance disclose several significant factors. The study demonstrates that although Greek IPOs overperform the market for a longer period, underperformance eventually emerges, in line with much international evidence. Our interpretation is that the persistence of overperformance over a significant interval is due to excessive supply of issues during the ‘hot IPO period’. Results associated with pricing during the ‘hot IPO period’ indicate positive short- (1-year), medium- (2-year) and negative long-term (3-year) performance.