Initial and long-term price performance of initial public offerings: Turkish experience 1990-1993

The purpose of this study is to examine both the initial and medium-long term price performance of initial public offerings in Istanbul Stock Exchange during the continuous 1990-1993 period. In the light of the findings, initial public offerings are found to be underpriced meaning that investors in initial public offering market can exercise significant short-term returns relative to the market. In addition, in the whole period, the effect of this initial underpricing continues up to the second month. However, when we look at the long-term results, it is seen that IPOs underperformed the market although the results are not significant. As a result, investors in the IPO merket can exercise initial abnormal returns but in the long-run they produce a negative return although not significant.