Long-Run Performance Following Equity Issue
In an effort to establish how the transition from private to public firm
affects performance, Paul A. Gompers is examining the long-run performance
of companies that issue equity in an initial public or seasoned offering.
He is also attempting to determine whether involvement with a venture capital
backer improves performance. Gompers is using recent innovations in multifactor
asset-pricing models to evaluate firm performance and is developing new
methods of measuring performance in varied settings. His findings to date
demonstrate that underperformance is concentrated in small companies, not
backed by venture capitalists, that went public in the early 1980s.