Abstract
This paper examines the initial and long-run performance of 130 Australian mining IPOs issued from 1979 to 1990. The results show an average underpricing of 107.18%, significantly higher than that previously documented for industrial firms. The time lapse between prospectus registration and listing, and the state of the market when the IPO is issued are the main explanatory variables for the observed underpricing. Contrary to the existing evidence, mining IPOs in Australia, on average, do not appear to significantly underperform the market in the long-run. The results show that delay in listing is significantly related to the long-run performance, with some evidence of a curvilinear relationship between underpricing and the one-year and two-year share returns.
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