Green energy companies: Stock performance and IPO returns

This study aims at investigating the performance of energy companies at IPO and highlighting the differences in underpricing and stock return trends of green energy companies compared to non-green ones. We select all energy stock IPOs between 2000 and 2014 on the main European markets and evaluate first day and long run performance to shed light on the differences of the two groups of firms. As further refinement, we evaluate the determinants of short and long term performance. Evidence shows that green companies have a lower underpricing, which nevertheless disappears after few days of trading and when controlling for underpricing determinants. In the long run, performances of green and non-green are similar and empirical results show that the traditional risk factors explain return dynamics.To the best of our knowledge, this is the first paper to analyse the underpricing and stock performance of green energy companies.

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