Comparison of sales methods in public offering in terms of underpricing: An implementation on Borsa iIstanbul between 2006 - 2013

In this study, data about 97 companies had been offered to public between 2006-2013 was analyzed, and the existence of underpricing in our country within the given years was investigated; also an analysis was conducted whether underpricing changes according to the sales methods or not. In addition to this, the closure prices of stocks and the first day total transaction volume data is acquired and a research has been conducted whether there is a relationship among the data. The concept of underpricingwas separately evaluated for the short term that covers the abnormal incomes of first day and first week; for the medium term that covers the abnormal incomes of the first month; and the long-term that covers the abnormal incomes between third and sixth month. According to the findings of the study, it has been indicated that the stock performances in short-term are higher, in all years an average of 7.95 % abnormal income and 18,60 % first week abnormal income. In medium term, the average abnormal income rate is calculated as 8.60 %. In the long term, when the third and sixth month data is used, the average abnormal income rates are calculated as 8.7% and 9.75 %. When we look at the findings, we can say that the stocks offered to public between 2006 and 2013 were not priced upon their real prices and an underpricing was conducted in BIST in the related years. It was also concluded that the sales methods used in public offering did not have any kind of impact in underpricing; and that the differences existed as a result of average abnormal incomes were just coincidental. A positive and weak relationship was determined between the first day prices of the stocks and the transaction volume. There are studies conducted about this subject in Turkey and in foreign markets, as the time period and price performance investigated has different periods, it has been thought that this study will contribute the literature. Keywords: İnitial Public Offering, Underpricing, Sales Techniques in Public Offering, BIST