Analysis of IPO Performance in Different Economic Cycles
Keywords:
IPO Performance, Economic Cycles, Market Sentiment, First-Day Return, GDP Growth, Unemployment RateAbstract
Initial Public Offerings (IPOs) mark a critical transition for companies from private to public ownership, significantly influenced by economic conditions and market sentiments. This study aims to analyze IPO performance across different economic cycles, focusing on metrics such as offer price, first-day close price, market capitalization, GDP growth, unemployment rate, and market sentiment. Utilizing data from various notable companies, this research evaluates short-term IPO performance during periods of economic expansion and recession. Descriptive statistics highlight central tendencies and variability, while regression analysis examines the impact of economic indicators on IPO performance. The findings reveal significant variability in first-day returns, driven by industry-specific factors and broader economic conditions. IPOs during economic expansions generally show higher first-day returns, especially in the technology and software sectors. Positive market sentiment is also linked to better IPO performance. This study provides valuable insights for investors, companies, and policymakers, aiding in strategic decision-making regarding IPO timing and conditions. Understanding IPO performance dynamics across economic cycles can enhance investment strategies and boost market confidence.
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