Long-Run IPO Performance In Indonesia Stock Exchange: Period 2008 – 2018

Abstract

This study aims to explore the long-term performance of companies that conducting Initial Public Offering (IPO) by looking at stock return behavior in the long run. Stock returns are calculated by comparing the closing price on the trading day for each observation period with the IPO price. Furthermore, Completely Randomized Design (CRD) is used to find differences in the average stock returns during the observation period. The results of this study found that high stock returns are generated by the company after 3 years of conducting an IPO with a value of 44.22, this shows the company needs time to improve company performance. While low stock returns are generated by companies on the first day of IPO and 5 years after the IPO with a value of - 0.98. This shows that there has been an underpriced at the time of the IPO and the company was underperformed after 5 years of conducting an IPO. Simultaneously, there is no difference in the average return during the observation period. Because the return obtained is the same between short-term investments and long-term investments, investors should be able to buy shares as short-term investments. This study uses secondary data and the number of samples used is 274 companies conducting IPOs on the Indonesia Stock Exchange for the period 2008 - 2018.