The performance of Initial Public Offerings (IPO) has been investigated in numerous
studies but little attention has been paid to shed more light on the factors that influence
the success of these IPOs. This paper investigates the relation between pre-IPO
characteristics and post-IPO operating performances. The objective of this study is to
identify the determinants of post IPO operating performance. The pre-IPO factors
include pre-IPO profitability, dilution of ownership, age and size of firm. The post-IPO
operating performances include: return on asset, return on sales and asset turnover.
Using newly public-listed companies on the Main Board of Bursa Malaysia from 2000
to 2004, findings confirmed that pre-IPO profitability and firm size are the key
predictors of post-IPO performance. The results obtained provide useful information
and caution for prospective investors in new issues
