STOCK MARKET WEALTH-EFFECTS DURING PRIVATIZATION INITIAL PUBLIC OFFERS IN CHILE (1984-1989)
DOI:
https://doi.org/10.1016/S0123-5923(10)70134-0Keywords:
Privatization, IPOs’ short-run underpricing, IPOs long-run under-performanceAbstract
We study the aftermarket performance of eleven privatization Initial Public Offers (IPOs) in Chile during 1984-1989, and provide a detailed description of the economic and political conditions that prevailed. In particular, we discuss the operational details of the stock issuing mechanism, complemented with a statistical study on the IPOs’ Market Adjusted Returns. While the sample size is limited and does not support a significant external validity, the analysis confirms the presence of aftermarket performance patterns that are very similar to those observed in private and privatization IPOs reported elsewhere (Aggarwal, Leal and Hernández, 1993; Dewenter and Malatesta, 1997; Loughran, Ritter and Rydqvist, 1994; Perotti and Guney, 1993).
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