Abstract:

(Is Underpricing IPO The Signal of Firm Quality?) Public Offerings of the stocks are the first stage in the cycle of fund demand and supply and this is the most widely researched topic in both developed and developing economies. The usability of models developed based on a theory has been changed depending on market structure. Hence, the empirical studies about public offerings are aimed to define characteristics of investors in those markets. The different studies carried out in both developed and developing economies have led an uniform results that would require to develop new models.In this study, 77 firms of whose stock prices are underpriced have been investigated for the years of 1992- 2002. Those firms investigated in terms of their accounting data, the stock price different between initial offerings dates and today, and the growth rate of the price. The results show that there is no relationship between accounting data and growth rate, but although it is so weak, there is a positive relationship between initial return and growth rate other research done in developing markets have presented the similar results.

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