On post-IPO stock price performance: A comparative analysis of RLBOs and IPOs

Sudip Datta, Mark Gruskin, Mai Iskandar-Datta

Research output: Contribution to journalArticle

4 Scopus citations

Abstract

This is the first study to examine the post-IPO stock price performance by differentiating between IPOs and three types of RLBOs (i.e. public-to-private (or re-IPOs), division-to-private, and private-to-private deals). We document that public-to-private RLBOs outperform their industry rivals, IPOs, mature firms in comparable industries, and a propensity-score matched control group for up to five years post-offering. Further, we document that, within RLBOs, public-to-private RLBOs, outperform private-to-private and division-to-private RLBOs. We also find support for the underwriter signaling effect for public-to-private RLBOs. Our analysis identifies for the first time what private period restructuring activities contribute to superior post-re-IPO stock price performance. Further, the beneficial effects of private period restructurings are enhanced for deals associated with prestigious underwriters. Our findings suggest that first IPOs and re-IPOs differ substantially in term of post-offer performance, the impact of prestigious underwriters on performance, and performance over time.

Original languageEnglish (US)
Pages (from-to)187-203
Number of pages17
JournalJournal of Banking and Finance
Volume55
DOIs
StatePublished - Jun 1 2015

All Science Journal Classification (ASJC) codes

  • Finance
  • Economics and Econometrics

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