Long-run performance analysis of a new sample of UK IPOs

36 month buy-and-hold returns are calculated for a recent sample of initial public offerings (IPOs) on UK stock markets in order to test the robustness of earlier results which suggest that IPOs deliver abnormally low long-run returns. A bootstrapped and skew-adjusted t statistic is employed. Overall, there is little evidence of significant abnormal long-run performance. Further tests reveal that the electronics and information technology IPOs experienced by far the highest initial returns but their long-run abnormal performance was poor. This may be the result of chance, or alternatively the sector may offer an isolated area of empirical support for theories of irrational stock market behaviour.