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This study analyzes the wealth effects of SEO announcements in the US during the COVID-19 pandemic and its main determinants. We find significantly negative abnormal returns of − 8.6%. This provides persuasive evidence that capital markets reacted particularly negative during this period, reflecting higher degrees of uncertainty. We furthermore find that larger firms experience a better SEO performance and that COVID-19 related biotech & healthcare firms react particularly negative. This effect is more negative the lower the company valuation beforehand.

In this paper we analyze the long-run stock price performance of 207 initial public offerings in the fashion and leather accessories industry between 1990 and 2007. We find a highly significant underperformance of IPO stocks compared to corresponding benchmark indices. Cross-sectional regression analysis reveals that underperformance is mainly driven by offerings of smaller, less mature companies that are not taken public by a prestigious underwriter. Nevertheless, we also find that fashion IPO firms experience a considerable reduction in their systematic risk exposure due to the realization of real options which helps to explain at least part of their seemingly poor stock price performance.JEL Classifications: D53, G32, L67

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