Investigating the operating performance of initial public offerings

This thesis examines long-term financial and operating performance of Turkish firms going public between 2010 and 2016. We employ four different performance models, namely pre-event adjusted, industry-adjusted, performance-matched, and difference-in-differences performance to investigate profitability, efficiency, liquidity and leverage in the three years after the firm goes public. Existing studies on Turkish initial public offerings only employ the raw and pre-event adjusted models to measure performance. The results confirm that the well-documented underperformance anomaly persists in the post-crisis period. Profitability, leverage, and liquidity all undergo improvements in the event year, while they revert to the pre-event levels soon after initial public offerings and underperform the industry in the second post-event year. Financial performance also deteriorates to a compounded %-63 abnormal return in the third year after going public.