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Initial Public Offerings (IPO)
book

Initial Public Offerings (IPO)

by Greg N. Gregoriou
December 2005
Intermediate to advanced content levelIntermediate to advanced
464 pages
23h 14m
English
Butterworth-Heinemann
Content preview from Initial Public Offerings (IPO)
7.6 Earnings management and post-offering stock return
underperformance
We would now like to turn our attention to the question of whether the poor post-
IPO stock return performance can be explained by previous earnings management. If
buyers are guided by earnings but are unaware that earnings are inflated by the gen-
erous use of accruals, they could pay too high a price. As information about the firm
is revealed over time in the post-offering period, investors will gradually temper their
optimism. Other things being equal, the greater the earnings management at the time
of the public offering, the larger the ultimate price correction. Therefore, ...
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Publisher Resources

ISBN: 9780750679756