This paper investigates the long run performance of 270 South African IPOs during the period
1996 to 2016. Significant under-pricing in the short term and underperformance in the long
term is found for equally-weighted event time CARs and buy-and-hold returns using two
market benchmarks. This study took the long-term period past five years all the way to ten
years to investigate if long-run underperformance persists in South African IPOs. It is found
that underperformance persists in IPOs that list on the JSE and this underperformance can be
explained by the window of opportunity hypothesis.
