Are hospitality industry IPO stock returns predictable?
Abbreviated Journal Title
Int. J. Hosp. Manag.
Hospitality; IPOs; Predictability; Overperformance; Free cash flows; Discretionary accruals; Altman's Z; INITIAL PUBLIC OFFERINGS; PERFORMANCE; Hospitality, Leisure, Sport & Tourism
We examine the post-IPO excess stock returns of hospitality firms from 1996 to 2012 and find under-performance relative to the market on average. However, there are large differences in returns and some firms significantly outperform. We demonstrate that a substantial portion of this variation can be reliably predicted by utilising pre-IPO financial measures such as firm size, free cash flows, discretionary accruals, and Altman's Z. Our findings are potentially valuable to prospective hospitality IPO investors in selecting which stocks to buy and to hospitality firm managers in setting IPO issue prices. (C) 2014 Elsevier Ltd. All rights reserved.
International Journal of Hospitality Management
"Are hospitality industry IPO stock returns predictable?" (2015). Faculty Bibliography 2010s. 6432.