M&A Characteristics and IPO Long-Term Performance

Abstract

Brau Couch and Sutton (2012) find that mergers and acquisitions of new publicly traded firms serve as a vital and previously unrecognized role in the long-term underperformance of initial public offering (IPOs) Based on their findings I further examine the association between acquisitions with three characteristics (method of payment bidder/target relatedness and target firm status) and IPO long-run performance I analyze 689 IPOs that become acquirers within the first year of IPO from 2001 to 2010 The univariate results and multivariate regression results show that IPOs that make cash acquisitions significantly outperform than IPOs that make non-cash acquisitions for 3-year holding periods following the first year while acquisitions with other two characteristics don’t have significant effect on IPO long-run stock performance

Date of Award	2015 Feb 2
Original language	English
Supervisor	Shao-Chi Chang (Supervisor)