Investing in IPOs - a Negative-Sum Game?

Main Article Content

Radosław Pastusiak


Keywords : Quantitative methods; Initial Public Offering (IPO); Investing attractiveness; Research methods
Abstract
This publication aims to analyze the profitability of investments in IPOs in the long term, and they take the risk of exposing investors who decide to invest in the newly launched company. This will be achieved by comparing the IPO market in the NewConnect and the Stock Exchange during the last three years, from 2009 to 2011. Compared are the parameters that describe the risks and the effectiveness of the investment. Highlighted the differences between the WSE and NC from the perspective of investment in the IPO. The analysis indicates that investment in the IPO since its debut on the WSE or NC by the end of calendar years, resulted in the loss. The average profitability of the investment expressed the arithmetic mean was negative except for two years (WSE 2010 and NC 2009). The median rates of return in the analyzed periods was negative in all analyzed years and in 2011 the Warsaw Stock Exchange and the NC, the NC and 2009 was below 25%. Analyzing the risk of using the available measurements, evidently NC market is burdened with higher volatility, which measures of risk such as standard deviation or variance, shall be the greater value.

Article Details

How to Cite
Pastusiak, R. (2012). Investing in IPOs - a Negative-Sum Game?. Zeszyty Naukowe SGGW - Ekonomika I Organizacja Gospodarki Żywnościowej, (99), 139–148. https://doi.org/10.22630/EIOGZ.2012.99.82
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