1This paper empirically analyses the initial and aftermarket returns for US Listed Shipping IPOs. Our main objective is to fulfil the great need for the U.S. Shipping evidence on long run performance of IPOs. We aim to test the extent to which signalling models explain the reasons for the issuance of IPOs using the long-term price performance approach. We concentrate on a sample of 61 IPOs listed during the period 1987-2007 in four major US Stock Exchanges, computing buy-and-hold abnormal returns (BHARs) and cumulative average returns (CARs). The results show that U.S. Listed Shipping IPOs are underpriced on initial trading day on average by only 4.44%, a figure which indicates an outstanding level of maturity for the shipping sector. In the long run, Shipping IPOs listed in the U.S. offer one-, two-, and three-year holding period returns (BHAR) of 7.50%, 7.73%, and 3.26%, respectively. The conclusion suggested by those results is that investing in U.S. is not a guaranteed investment for long-term Shipping IPOs oriented investors.Keywords: Shipping Finance; Initial Public Offerings; Performance of IPOs; Market Volatility; 1 To whom correspondence should be addressed: e-mail: d.gounopoulos@surrey.ac.uk We thank Ken French for providing access to the historical size and book-to-market breakpoints, portfolio returns, and factor returns. Ioannis Papadimitriou provided excellent research assistance.2
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