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RISK AND RETURN ON NEWLY LISTED STOCKS: THE POST‐LISTING EXPERIENCE
Author(s) -
Bhandari Arvind,
Grammatikos Theoharry,
Makhija Anil K.,
Papaioannou George
Publication year - 1989
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.1989.tb00105.x
Subject(s) - listing (finance) , seasoning , business , anomaly (physics) , accounting , actuarial science , finance , chemistry , raw material , physics , organic chemistry , condensed matter physics
Researchers consistently find that newly listed stocks underperform in the post‐listing period. It has been suggested that this anomalous finding may, in part, be explained away if the risk during this period is lower than at other times. Evidence is presented here that the riskiness of newly listed stocks undergoes a seasoning process. Instead of lower risk, riskiness is found to be greater immediately after listing than in later periods. This suggests that the post‐listing anomaly is actually worse than has been previously recognized.