Can Firms CEOs Predict the Future Performance after Going Public?

This paper examines how the post-IPO operating performance is determined. Unlike previous studies, we obtain the expected operating performance of IPO firms. Our findings are as follow. First, we find weak evidence of the agency problem that IPOs with high secondary shares record lower sales, but the realized sales is still above the expected sales. We also find the cyclicity in the IPO market: the difference between realized and expected sales (profit) negatively relates to the IPO market.