Company Profitability Before and After IPO. Is it a Windows Dressing or Equity Dilution Effect?

Pastusiak, Radosław; Bolek, Monika; Malaczewski, Maciej; Kacprzyk, Marta

doi:10.18267/j.pep.540

Cited by 14 publications

(21 citation statements)

References 13 publications

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“…Yunanto and Daryono (2014) state that the ability of SMEs to generate profits does not experience significant changes after conducting an IPO. Another study was conducted by Pastusiak, Bolek, Malaczewski, & Kacprzyk (2016) which stated that the company's ability to generate profits actually declined after conducting an IPO.…”

Section: Introductionmentioning

confidence: 99%

Financial Performance Analysis of SMEs Before and After Initial Public Offering (IPO) on the Indonesia Stock Exchange (IDX)

Wahyono¹

2018

BISE

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SME funding needs have not been fully met. IPO is one of the efforts that can be done by SMEs to meet these funding needs. However, it is not yet known whether the financial performance of SMEs will increase after conducting an IPO. This study aims to analyze the financial performance of SMEs before and after the IPO. The sample of this study is SMEs that listed on the IDX in 2017, which is as many as five SMEs. SME financial performance is measured through three SME financial ratios, namely liquidity, solvency, and profitability. The paired sample t-test was used to compare the financial performance of SMEs before and after the IPO. The results showed that there is no significant difference in the financial performance of SMEs before and after the IPO. The results of this study provide recommendations for further research related to the valuation and performance of SME IPOs.

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Section: Introductionmentioning

confidence: 99%

Financial Performance Analysis of SMEs Before and After Initial Public Offering (IPO) on the Indonesia Stock Exchange (IDX)

Wahyono¹

2018

BISE

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“…The years 2004 -2014 were quite encouraging for Indonesia's economic performance due to leaving the low-income zone. During this period Indonesia's average economic growth reached 5.8% higher compared to Malaysia and Thailand by only 5.0% and 3.9% [1]. But in 2014 -2018 decreased and relatively stable.…”

Section: Introductionmentioning

confidence: 85%

“…According Pastusiak [1] companies that have registered as Initial Public Offering (IPO) will experience a share price decline in the first three years. Even after the IPO, the results have declined compared to before the tIPO-1 period.…”

Section: Introductionmentioning

confidence: 99%

Designing Strategy of Indonesia Port Car Terminal Based on Analysis of Profitability Ratio Before And After the IPO

Ilman

Chumaidiyah

Zulbetti

2021

MECHTA

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<p class="02abstracttext">Indonesia has managed to get out of the low-income zone and into the middle-income zone. However, Indonesia still has a challenge that is to get out of the middle-income trap zone. These challenges must be resolved by improving the performance of BUMN. Indonesia Port Center Terminal is one of the BUMN subsidiary companies precisely a subsidiary of Indonesia Port Center II (Persero). The purpose of the study was to determine differences in performance indicators before and after the IPO in profitability ratios, namely ROA, ROE, OPM, and NPM and recommendations for performance improvement strategies. The data obtained is based on the 2016-2019 financial statements and questionnaires to expert judgment. The method used is the Wilcoxon Paired t-Test, AHP, and SWOT test. The results of the Wilcoxon Paired t-Test test before and after the IPO were no difference. The results of the company's SWOT analysis are in the position of quadrant I (strength and opportunities). The recommended strategy applied in this condition is to support an aggressive growth policy that prioritizes the strengths and opportunities of the company.</p>

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“…However, research shows that an increasing number of IPO firms under-perform in the years after going public (Jin et al 2017;Pastusiak et al 2016;Mikkelson et al 1997); this phenomenon also exists in the Chinese stock markets (Gao et al 2021;Gui and Lai 2005), which is what stimulated our research interest. Gao et al (2021), based on the data from the Growth Enterprise Market of China (GEMC), showed that IPO firms have no contributions to income-and profit-related performance because the majority of these IPO firms are unable to spend IPO capital on operating performance.…”

Section: Introductionmentioning

confidence: 93%

Why the Operating Performance of Post-IPO Firms Decreases: Evidence from China

Long

Lin

Chen

2021

JRFM

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Based on a database of 200 listed firms from the Growth Enterprise Market of China, this paper employs regression models to investigate the significance of IPO capital expenditure to firms’ operating performance. It suggests that a vast majority of pre-IPO money is spent on business development to promote operating performance in order to meet IPO requirements. After the IPO, most of the money is transferred to equity investments in order to increase the firms’ market value quickly, which leads to operating performance decline and deterioration.

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Company Profitability Before and After IPO. Is it a Windows Dressing or Equity Dilution Effect?

Cited by 14 publications

References 13 publications

Financial Performance Analysis of SMEs Before and After Initial Public Offering (IPO) on the Indonesia Stock Exchange (IDX)

Financial Performance Analysis of SMEs Before and After Initial Public Offering (IPO) on the Indonesia Stock Exchange (IDX)

Designing Strategy of Indonesia Port Car Terminal Based on Analysis of Profitability Ratio Before And After the IPO

Why the Operating Performance of Post-IPO Firms Decreases: Evidence from China

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