Are Hospitality Industry IPO Stock Returns Predictable?
Keywords
IPO, Hospitality, Restaurant, Hotel, Excess Returns
Abstract
We examine the post-IPO excess stock returns of hospitality firms from 1996 to 2012 and find underperformance 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 utilizing 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.
Publication Date
9-9-2014
Original Citation
Borghesi, R., Annaraud, K., & Singh, D. (2015). Are Hospitality Industry IPO Stock Returns Predictable? International Journal of Hospitality Management, 44, 23-27.
Number of Pages
23-27
Document Type
Paper
Language
English
Source Title
International Journal of Hospitality Management
Volume
44
Copyright Status
Unknown
Copyright Date
2014
College
Rosen College of Hospitality Management
Location
Rosen College of Hospitality Management
STARS Citation
Borghesi, Richard; Annaraud, Katerina; and Singh, Dipendra, "Are Hospitality Industry IPO Stock Returns Predictable?" (2014). Faculty Scholarship and Creative Works. 176.
https://stars.library.ucf.edu/ucfscholar/176
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