The Post-Offering Price Performance of Closed-End Funds
Financial Management, Vol. 18, No. 3, 1989
Posted: 12 Feb 2008
This study documents the price behavior of closed-end funds after an initial public offering. The comparison of aftermarket price performance of closed-end funds with a control sample of similar size equity IPOs indicates that closed-end funds, on average, underperform other initial public offerings. IPOs of U.S. stock and foreign stock closed-end funds experience significant losses in value. An examination of institutional holdings of IPOs of closed-end funds indicates that individual investors are most affected by the substantial decline.
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