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Operating Measures, Ipo Valuation, And After Market Performance-Perspective From Internet Bubble Period, Yuhong Fan
Operating Measures, Ipo Valuation, And After Market Performance-Perspective From Internet Bubble Period, Yuhong Fan
Theses and Dissertations in Business Administration
Internet related firms experienced an extremely high degree of underpricing in the year 1999 and 2000; 40 percent more than underpricing of Non-Internet firms. Two explanations for this phenomenon are examined: the changing-risk composition hypothesis and overreaction hypothesis. Empirical tests are conducted in three stages: first trading day, short-term, and long-term performances. The results are consistent with both hypotheses, and the high initial returns for Internet firms are explainable by investors' overreaction and the firm's high uncertainties.