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Style Investing, Style Timing, and IPO Return Predictability

Samar Ashour & Qing Hao

Financial Management2026https://doi.org/10.1111/fima.70025article
AJG 3ABDC A*
Weight
0.50

Abstract

Style investing is often viewed as a phenomenon confined to seasoned stocks, yet its influence emerges during the IPO process. Using a sample of US IPOs from 1975 to 2022, we find that higher pre‐IPO style returns are significantly associated with greater IPO underpricing. We further find evidence of style timing: firms are more likely to go public when their associated style is performing well, and such IPOs proceed to market more quickly. However, IPO stocks linked to hot styles subsequently underperform within a year, suggesting a reversal in stock performance after going public. Our findings reveal that style investing influences IPO pricing, timing, and aftermarket performance, extending behavioral theories of style momentum to the primary market.

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https://doi.org/https://doi.org/10.1111/fima.70025

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@article{samar2026,
  title        = {{Style Investing, Style Timing, and IPO Return Predictability}},
  author       = {Samar Ashour & Qing Hao},
  journal      = {Financial Management},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1111/fima.70025},
}

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Style Investing, Style Timing, and IPO Return Predictability

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.