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IPO Market Cycles: An Exploratory Investigation
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IPO Market Cycles: An Exploratory Investigation

Michelle Lowry
SSRN Electronic Journal
2001
url
https://doi.org/10.2139/ssrn.209008View
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Abstract

This paper examines cycles in the frequency of initial public offerings (IPOs) and their relation to the average initial returns realized by investors who participated in the IPOs. There are strong cycles in the IPO market. We find that initial returns are predictably related to past initial returns and to future IPO volume. This predictability occurs because of the time it takes to complete an IPO. Using data on individual issues, we model the price updates that occur between initial filing and the IPO, as well as the IPO return. We use aggregate U.S. data from 1960-98, and firm-level data from 1985-97

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