25 Years of Dutch Ipos

22 Pages Posted: 19 Aug 2005

See all articles by Ronald Q. Doeswijk

Ronald Q. Doeswijk

Independent

Hemmo S.K. Hemmes

Cardano; IRIS, Institute for Research and Investment Services, The Netherlands

Roland Venekamp

ROBECO Group

Date Written: July 2005

Abstract

This study focuses on the existence of the initial underpricing and the long-term underperformance anomalies in the Dutch IPO market between 1977 and 2001, and whether the strength of these anomalies differs during hot and cold issue periods. We compared the performance of each IPO with its specific sector benchmark and found an average initial underpricing level of 17.6%. In the long run the performance of the total IPO sample does not differ from its benchmark. The period from 1997 until the beginning of 2000 was a true 'hot issue' period for IPOs in the main sector growth. Their level of initial underpricing was 35.8% compared to 9.2% uring 'cold issue' periods. These growth IPOs also significantly underperformed their benchmark by 38.4% after three years. This performance was significantly worse than that of growth IPOs in 'cold issue' periods.

Keywords: Dutch stock market, IPO, 'hot' and 'cold issue' periods, initial underpricing, long-term underperformance

JEL Classification: G12, G14, G24

Suggested Citation

Doeswijk, Ronald Q. and Hemmes, Hemmo S.K. and Venekamp, Roland, 25 Years of Dutch Ipos (July 2005). Available at SSRN: https://ssrn.com/abstract=782684 or http://dx.doi.org/10.2139/ssrn.782684

Hemmo S.K. Hemmes

Cardano ( email )

Rotterdam 3011 AA
Netherlands
+442031705927 (Phone)

IRIS, Institute for Research and Investment Services, The Netherlands ( email )

Coolsingel 120
P. O. Box 1296
3000 BG Rotterdam
Netherlands

Roland Venekamp

ROBECO Group ( email )

P.O. Box 973
3000 AZ Rotterdam
Netherlands

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