The price performances of initial public offerings and emprical study in ise on the years of 2006 and 2007

Initial Public Offering which is the main subject of this study, offers new and low costed alternative to the insitutions on the way to find new funds. The institutions which don?t opt to deal with their partners who can participate in the capital raising and the banks which will provide expensive funds, can sell their existing stocks in the market which will help them to increase their liquidity and also to reach low costed fund sources.The developments in the capital markets helps the initial public offerings to be demanded not only by the local but also by the international investors and this helps the institutions to provide funds more easily. However, when the institutions provide these funds, they also care about the interest and the attraction on the stocks and due to this they give importance to the pricing activities. In these pricing activities which will be made either by the institution itself or by the consultants or intermediaries, low pricing is usually preferred. This is because of increasing the attractiveness on the stocks which will help them to sustain their image in the market.This kind of pricing has been pulling interest on itself since the first initial public offerings start to take place. Therefore, with several studies done by the researchers, they have tried to reach a conclusion regarding the first day, short term and long term performances of the stocks whether low pricing has been used or not.In this study, we have also tried to contribute to the relevant studies which have been done on the first day performances of the stocks that have been researched by several reserachers by introducing a different approach. Consequently, for 2006 and 2007, we have tried to find the price differences of the stocks that have been initially offered to the public in their first day between their closing and opening values. After finding this information, we have analysed whether this price difference is meaningfully more than overall price change in IMKB for that specific day. With this analyses, we have found out 13 stocks have been priced low out of 24 stocks where we couldn?t reach this conclusion for the other 11 stocks in 2006 and 2007 with a confidence interval of 0.05. To sum up, the result of this analyses has shown that, not all of the companies that are initially offering their stocks to the market select low pricing but there are some companies that try to achieve the highest possible revenue with applying high pricing strategies.