Price Cap Effect In The Performance Of Greek IPOs

The Initial Public Offerings (IPOs) pricing has become a leading example of market inefficiency during the last decades. Although there is an extensive amount of work that provides some evidence for the existence of short-term excess performance, there is no study to document price cap effect cases. The three price cap changes introduced in a period of only six years (1993-1999) provide the grounds for investigating the implications of interventions on the pricing of new issues on the first day of trading. This paper not only examines the price cap phenomenon of IPOs in a small but dynamic developing market as Greece, but also examines ten factors that probably affect the performance of new issues under price cap pressure in the short run.