| dc.description.abstract | We study Nordic high-growth IPOs, measuring firms’ ability to meet the revenue growth expectations
that their offer prices imply, and estimating the relationship between growth expectations and
abnormal returns. We identify implied growth expectations as the revenue growth rates that satisfy
IPO offer prices in our standardized DCF model. We find that Nordic high-growth IPOs meet
expectations on average, are not underpriced – having average 1st day returns of -2.1%, and do not
exhibit long-run underperformance – with average annual Fama French abnormal returns of 17%.
Moreover, implied growth is negatively related to 1st day abnormal returns and positively related to
long-run abnormal returns. We conclude that these relationships are consistent with an initial risk
adjustment and a subsequent positive performance adjustment. | en_US |
