Research Paper Easy- Identify an initial public offering (IPO) that has been announced and completed at least 3 years back
Identify an initial public offering (IPO) that has been announced and completed at least 3 years back (since 3-year post-IPO price performance is required).
Compute underpricing (1st day closing price – IPO price) / IPO price. Compare it with the market return on the IPO day.
Compare the stock performance with market (S&P500) performance over 3 year
following the IPO. Download historic stock returns from yahoo.com. Draw a graph of
compounded daily stock returns and compounded daily market returns from the 2nd
trading day to 3 years after the IPO. That is, 2nd day compounded return = (2nd day closing price – 1st day closing price) / 1st day
closing price 3rd day compounded return = (3rd day closing price – 1st day closing price) / 1st day
closing price
