ANALYSIS OF THE POST IPO PERFORMANCE OF COMPANIES

Abstract

The main purpose of this research is to understand the effect of an Initial public Offering (IPO) and the dynamics associated with raising money from the stock market. The importance of this research is to provide an empirical analysis of the aftermath of an IPO performance of companies in Nigeria, as previous studies include developed countries like U.S and china but there is still limited research on Africa’s capital market and also stock performance. An event study method of research study is used to measure the impact of an event on stock performance. In this study, the event represents the “Initial public Offering”. This study involves a sample of 6 companies that launched their IPO in 2009 was reviewed within a 10year interval from 2009- 2017.The six variables of financial performance indicators used in this study includes sales, net income, profitability ratios (return on assets and return on equity), weighted-cost of capital and market capitalization. A comparative review of all the companies the findings suggest the negative impact of an IPO as it affects the performance of companies.