Abstract:

The of this study is to find out if the investors may have abnormal returns statistically significant  by investing IPOs (Initial Public Offering), which have been offered between 2002 and 2006, via analyzing their long-term performance at BIST (Borsa Istanbul). IPOs' performances after one, three and five year are measured via buy and hold return methodology. Abnormal returns are considered in line with CAPM (Capital Asset Pricing Model) approach. Findings show that by increasing holding duration of IPOs, the number of IPOs which have positive returns are going up. It is also observed that portfolios composed by IPOs have abnormal returns of -13,2% after one year; 19,4% after three years and 79,2% after five years. On the other hand, while observing overpricing after one year holding and underpricing after three years are not statistically significant, underpricing for five years holding period is statistically significant. This means that, investors may gain abnormal return in case investing and holding IPO for five years.

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