TITLE:
Long-Term Outperformance of Equity Carve-Outs?— Evidence from Germany
AUTHORS:
Arnd Schikowsky, Dirk Schiereck, Arndt Volkle, Christian Voigt
KEYWORDS:
Equity Carve-Out; Initial Public Offering, Long-Term Return, Underpricing
JOURNAL NAME:
Technology and Investment,
Vol.1 No.1,
March
1,
2010
ABSTRACT: While there has been done a lot of empirical research on IPO performance in general only Prezas et al. [1] focus on equity carve-outs (ECOs) in comparison to common IPOs from an investor’s point of view. ECOs are an often applied divestment alternative used by technology companies to refocus their core businesses. Our note is claiming to extent this distinct literature in two ways. Firstly, we add new insight from a European market, namely Germany, and secondly, we apply a wider methodological spectrum to compare IPOs and ECOs. We find that controlling for the specific return characteristics of IPOs there remain hardly any sig-nificant performance divergences between the two samples.