Year of Graduation
Analysis of the Long-term Return of Russian Companies' Stocks after Public Offerings
This paper investigates the long-term return of Russian companies’ stocks after public offerings. Some years ago, few could intelligibly explain the meaning of the combination of words – public offering (initial or secondary), but now this collocation is very popular in markets all over the world. IPO and SPO as financing tools are increasingly coming into fashion, and number of companies that have intention to enter the stock markets is growing strongly every year. For Russia, this method of financing is quite new, but, at the same time, it has great potential for development, and the Russian IPO-SPO market is becoming more and more important every year for foreign and Russian investors and companies-issuers. Therefore, the analysis of the long-term return of Russian companies’ stocks after public offerings and the identification of factors that affect long-term return are particularly relevant now. Research in this field will allow analysing how and in what conditions it is right to conduct public offerings in order to obtain a large long-term return. In addition, it can influence the investment decisions of companies in time of public offerings, so that the deal is more successful and helps improve the position of the companies in the market and in the industry. This research of long-term return of Russian companies’ stocks after public offerings was conducted on the basis of a sample of 104 Russian companies that were going public between 2003 and 2013. As a result, there is a positive relationship between the long-term return of Russian companies’ stocks and the capitalization of the company during the offering as a percentage of the country's capitalization, the offer size, the refinancing rate of the country during the offering. Likewise, there is a negative relationship between the long-term return of Russian companies’ stocks and the primary underpricing of shares, the percentage of equity issued.