Title

Are hospitality industry IPO stock returns predictable?

Authors

Authors

R. Borghesi; K. Annaraud;D. Singh

Comments

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Abbreviated Journal Title

Int. J. Hosp. Manag.

Keywords

Hospitality; IPOs; Predictability; Overperformance; Free cash flows; Discretionary accruals; Altman's Z; INITIAL PUBLIC OFFERINGS; PERFORMANCE; Hospitality, Leisure, Sport & Tourism

Abstract

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.

Journal Title

International Journal of Hospitality Management

Volume

44

Publication Date

1-1-2015

Document Type

Article

Language

English

First Page

23

Last Page

27

WOS Identifier

WOS:000347365100003

ISSN

0278-4319

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