ABSTRACT
Conventional wisdom often advises that long-term investors enjoy positively abnormal returns (Daniel et al. 1998, Eberhart et al. 2004). IPOs are important ingredients of the stock markets. On the one hand, getting listed allow the firms to access a large pool of capital for future expansion. On the other, getting listed allow entrepreneurs and venture capitals (VCs) to withdraw, at least partially, from their prior investments with positive returns. The public investors can then share the firm's growth benefits with various other stakeholders. Interestingly, declining post-listing performance seems increasingly common in recent decades (Kooli and Suret 2004). Some studies have documented the declining performance of certain stocks in their post-listing period as investor under- or over-reaction towards firm behaviour (Ritter 1991. Aggarwal et al. 1993, Loughran and Ritter 1995). In other words, firm post-listing performance may also bring negative returns to stock market investors.
