ABSTRACT

Megginson, Nash, and Randenborgh, 1994 confirmed that there had been an improved
financial performance. The performance of State-owned enterprise (SOEs) was influenced by
the basic model of privatization. This research was intended to acknowledge and analyze;
how was the model of privatization of State-Owned Enterprises (SOEs) in Indonesia?; what
was the new common stock or divestment?; how was the price of stock of IPO in SOEs in
Indonesia?; What were over-value or under-value?; and how was the financial performance
(return on sales, return on equity) of SOEs in Indonesia pre-privatization and post - privatization?
The research employed paired sample T Tes of statistic analysis. It aimed to seek for
the difference of the financial performance pre-privatization and post-privatization. The
research showed that (1) All SOEs were privatized by issuing new stock; (2) four privatized
SOEs experienced under-value, and the other one had over-value; (3) two SOEs had better
financial performance at post-privatization compared to pre-privatization.
Keywords: IPO, privatization, over and undervalue, return on sales and return on equity.