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ASX small firm/microcap listings: the IPO ‘Pop’ and two decades of subsequent returns

ASX small firm/microcap listings: the IPO ‘Pop’ and two decades of subsequent returns We examined IPO discounts and average returns for all available ASX (de)/listed IPOs from 1999 to 2019. We found that the average 18.45 percent offering discount was close to that observed in the US, as were the discount time series behaviour and distribution. Furthermore, the average annualised return on a market‐weighted portfolio of the ASX small/microcap IPOs, from close‐of‐listing‐day price to delisting or 31 December 2019, is 18.62 percent compared to 2.28 percent for large‐caps. Small/microcap post‐listing return differentials were highest for listings filed in Western Australia, and for the metals and mining and software industries. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting & Finance Wiley

ASX small firm/microcap listings: the IPO ‘Pop’ and two decades of subsequent returns

Accounting & Finance , Volume Early View – Dec 1, 2021

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Publisher
Wiley
Copyright
Accounting and Finance © 2021 Accounting and Finance Association of Australia and New Zealand
ISSN
0810-5391
eISSN
1467-629X
DOI
10.1111/acfi.12887
Publisher site
See Article on Publisher Site

Abstract

We examined IPO discounts and average returns for all available ASX (de)/listed IPOs from 1999 to 2019. We found that the average 18.45 percent offering discount was close to that observed in the US, as were the discount time series behaviour and distribution. Furthermore, the average annualised return on a market‐weighted portfolio of the ASX small/microcap IPOs, from close‐of‐listing‐day price to delisting or 31 December 2019, is 18.62 percent compared to 2.28 percent for large‐caps. Small/microcap post‐listing return differentials were highest for listings filed in Western Australia, and for the metals and mining and software industries.

Journal

Accounting & FinanceWiley

Published: Dec 1, 2021

Keywords: ASX listings; Delistings; ASX IPO discount; small/microcap underpricing; venture capital; long‐term IPO returns

References