When should an investor buy a newly issued stock?

Abstract

This study documents the amount of time it takes for Initial Public Offerings (POs) to make the transition from underperformance to meeting or exceeding the return for firms of similar size. The study looks at yearly holding period lengths of 1 to 10 years. The results of this study show that if purchased on issuance date, IPOs need to be held for over five years in order to make a return equal to the market.

Citation

Boyer, C.M. (2004), "When should an investor buy a newly issued stock?", Managerial Finance, Vol. 30 No. 1, pp. 5-16. https://doi.org/10.1108/03074350410768804