The New Issues Puzzle

The New Issues Puzzle

  • TIM LOUGHRAN
  • JAY R. RITTER

Article first published online: 30th April 2012 DOI: 10.1111/j.1540-6261.1995.tb05166.x

Abstract


Companies issuing stock during 1970 to 1990, whether an initial public offering or a seasoned equity offering, have been poor long‐run investments for investors. During the five years after the issue, investors have received average returns of only 5 percent per year for companies going public and only 7 percent per year for companies conducting a seasoned equity offer. Book‐to‐market effects account for only a modest portion of the low returns. An investor would have had to invest 44 percent more money in the issuers than in nonissuers of the same size to have the same wealth five years after the offering date.

Sign in to access the full article.

Related articles


Association Meetings

Article first published online: 30th November 2015 / DOI: 10.1111/j.1540-6261.1995.tb00153.x

Read Article

Announcements

Article first published online: 30th November 2015 / DOI: 10.1111/j.1540-6261.1995.tb00154.x

Read Article

Back Matter

Article first published online: 30th November 2015 / DOI: 10.1111/j.1540-6261.1995.tb00155.x

Read Article

Front Matter

Article first published online: 30th November 2015 / DOI: 10.1111/j.1540-6261.1995.tb00152.x

Read Article

Trading Behavior and the Unbiasedness of the Market Reaction to Dividend Announcements

  • MUKESH BAJAJ
  • ANAND M. VIJH

Article first published online: 30th April 2012 / DOI: 10.1111/j.1540-6261.1995.tb05173.x

Read Article

Stock Volatility and the Levels of the Basis and Open Interest in Futures Contracts

  • NAI‐FU CHEN
  • CHARLES J. CUNY
  • ROBERT A. HAUGEN

Article first published online: 30th April 2012 / DOI: 10.1111/j.1540-6261.1995.tb05174.x

Read Article

Are you an Author?


Please read our submission requirements and find out how to submit your paper to the Journal of Finance

Submit a paper