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Expiration Of Ipo Lock Up Period
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Book Synopsis The Expiration of IPO-Lockup Periods by : Oliver Terhechte
Download or read book The Expiration of IPO-Lockup Periods written by Oliver Terhechte and published by GRIN Verlag. This book was released on 2020-09-16 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2020 in the subject Business economics - Investment and Finance, grade: 1.3, University of Mannheim, language: English, abstract: This paper analyses the expiration of IPO-lockup periods and its affects on stock returns using event study methodology. The study focuses on 5,171 IPOs with lockup agreements in the U.S. market between 1988 and 2018. Significant differences in cumulative abnormal returns due to various firm characteristics are explored. This thesis is largely based on the paper of Field and Hanka (2001) and assesses whether the expiration of lockup periods results in abnormal returns and daily trading volume. For this purpose, an event study for 3,306 lockup agreements of IPOs over a 31-year period from 1988 until 2018 is performed. The sample is limited to the United States as the newly listed firms' domicile nation. The changes in daily trading volume around the expiration date of the lockup are also analysed. Moreover, the paper examines the length of the agreed lockup periods and whether tech firms react differently to the expiration from firms in other industries.
Book Synopsis Grow or Go? The Expiration of IPO Lockups in Germany by : Samuel Kemper
Download or read book Grow or Go? The Expiration of IPO Lockups in Germany written by Samuel Kemper and published by GRIN Verlag. This book was released on 2020-12-23 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: Bachelor Thesis from the year 2020 in the subject Economics - Finance, grade: 1.0, University of Frankfurt (Main) (Finance), language: English, abstract: In this study I examine the case of lockup period expirations for 142 IPOs in Germany between 2000 and 2019. I find significant abnormal returns around the expiration date of lockup periods during which existing shareholders are prevented from selling their shares. Both, abnormal returns and abnormal trading volumes around the unlock day are much larger for firms financed by venture capital or private equity. These findings are robust to different market models and are not due to market microstructure effects. When examining the cause for the observed abnormal returns abnormal trading volume and company size become prominent.
Book Synopsis Venture Capital and IPO Lockup Expiration by : Bradford D. Jordan
Download or read book Venture Capital and IPO Lockup Expiration written by Bradford D. Jordan and published by . This book was released on 2014 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: Most initial public offerings (IPOs) feature so-called quot;lockupquot; agreements, which bar insiders from selling the stock for a set period following the IPO, usually 180 days. We examine stock price behavior in the period surrounding lockup expiration for a sample of 2,529 firms over 1988 to 1997. We find that lockup expirations are, on average, associated with significant, negative abnormal returns, but the losses are concentrated in firms with venture capital (VC) backing. For the VC-backed group, the largest losses occur for quot;high-techquot; firms and firms with the greatest post-IPO stock price increases, the largest relative trading volume in the period surrounding expiration, and the highest quality underwriters.
Book Synopsis IPO Lockup Expiration in the Middle East and North Africa Region by : Tatiana Hakim
Download or read book IPO Lockup Expiration in the Middle East and North Africa Region written by Tatiana Hakim and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines stock price reaction to IPO lockup expiration in the Middle East and North Africa (MENA). A lockup is the period of time following an IPO during which founders and insiders are not allowed to sell their shares. Lockups in the MENA region are generally longer and more varied than those in the United States, providing an opportunity to study the relationship between their duration and market reaction. I test whether, as in the United States, there is an abnormal increase in trading volume and negative abnormal return around the unlock date, and find that contrary to the United States there is no noticeable reaction. I provide evidence that the difference in market reactions of U.S. and MENA companies is partly attributable to the laws in the MENA region, which dampens or more strongly restricts selling by insiders during the IPO period.
Book Synopsis Expiration of IPO Lock-up Period by : Jianning Huang
Download or read book Expiration of IPO Lock-up Period written by Jianning Huang and published by . This book was released on 2004 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis The Expiration of IPO Share Lockups by : Laura Casares Field
Download or read book The Expiration of IPO Share Lockups written by Laura Casares Field and published by . This book was released on 2002 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine 3,217 share lockup agreements that prevent insiders from selling shares immediately after the IPO. In the week the lockup agreements expire, we find a permanent 40 percent increase in average trading volume, and a statistically prominent cumulative abnormal return of -1.8 percent. The abnormal return is not quickly reversed, is stable over our ten year sample period, and is not due to changes in the proportion of trades at the bid price. The abnormal return is much more pronounced when the firm is venture financed, and we find that venture funds sell more aggressively than other pre-IPO shareholders. Prior to the scheduled expiration day, we find that six percent of lockup agreements are abrogated by substantial insider share sales.
Book Synopsis Stock Reaching to the Expiration of IPO Lock-up Period by : Sirima Dissara
Download or read book Stock Reaching to the Expiration of IPO Lock-up Period written by Sirima Dissara and published by . This book was released on 2007 with total page 128 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Abnormal Initial Public Offering (IPO) Price Performance and the Lockup Expiration by : Zachary Smith
Download or read book Abnormal Initial Public Offering (IPO) Price Performance and the Lockup Expiration written by Zachary Smith and published by . This book was released on 2009 with total page 11 pages. Available in PDF, EPUB and Kindle. Book excerpt: This project's goal was to evaluate whether abnormally negative performance occurred in the 5-day period surrounding the expiration in the lockup period. This research project used a sample of 5,559 IPOs that went public from 1985 to 2002 to determine the extent of abnormal performance occurring during the expiration of the lockup period. Using (a) standard t tests and (b) nonparametric Wilcoxon Signed Rank Tests of abnormal performance, this analysis provides evidence that IPOs do experience a significantly negative performance event during the expiration of their lockup period.
Download or read book Going Public written by Tim Jenkinson and published by Oxford University Press, USA. This book was released on 2001 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: Going Public investigates why companies routinely underprice themselves as they try to list themselves on the stock exchange. They subsequently underperform over the long-term and, in Going Public, the authors explore these 2 phenomena in plain English.
Book Synopsis Information Content of Insider Trades, IPO Lockup Expiration and Long-run IPO Performance by : Hafiz Hoque
Download or read book Information Content of Insider Trades, IPO Lockup Expiration and Long-run IPO Performance written by Hafiz Hoque and published by . This book was released on 2010 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Insider Trading Before IPO Lockup Expiry Dates by : Hafiz Hoque
Download or read book Insider Trading Before IPO Lockup Expiry Dates written by Hafiz Hoque and published by . This book was released on 2009 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyse the trading behaviour of insiders before the termination of IPO lockup arrangements of a sample of 831 IPOs on the London Stock Exchange over the period 1999 to 2007. We find that the average lockup period of 365 days is significantly higher than the 180 days in the US, and large insider trading activity occurs during this period as insiders sell in over-performing and buy in underperforming IPOs. The results suggest that this early trading activity is likely to be pre-arranged with the underwriters, and that, while the sell trades can be considered as an early release following good performance, the buy trades are likely to be undertaken to support the price of underperforming IPOs. These IPOs are also more likely to have longer lockup periods, larger proportion of shares locked up, and more likely to be backed by venture capitalists. The documented negative price reaction on lockup expiry dates is positively related to the probability of early buys of insiders, not early sells.
Book Synopsis The Expiration of Mandatory and Voluntary IPO Lock-up Provisions: Empirical Evidence from Germany Neuer Markt by :
Download or read book The Expiration of Mandatory and Voluntary IPO Lock-up Provisions: Empirical Evidence from Germany Neuer Markt written by and published by . This book was released on with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This chapter explores the stock price impact of expirations of lock-up provisions that prevent insiders from selling their shares after the Initial Public Offering (IPO). We examine 172 lock-up expirations of 142 IPOs floated on Germany Neuer Markt. We detect significant negative abnormal returns and a 25% increase in trading volume surrounding lock-up expiration. The negative abnormal returns are larger for firms with high volatility; superior performance after the IPO, low free float, and venture capital financed firms. The negative price reaction is significantly stronger for the expiration of voluntary lock-up agreements than for mandatory prohibitions of disposal.
Book Synopsis Strategic IPO Underpricing, Information Momentum, and Lockup Expiration Selling by : Rajesh K. Aggarwal
Download or read book Strategic IPO Underpricing, Information Momentum, and Lockup Expiration Selling written by Rajesh K. Aggarwal and published by . This book was released on 2002 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: Managers of firms going public usually do not sell their own shares at the initial public offering. Instead, they often sell a portion of their shares at the end of the lockup period. We develop a model in which the manager strategically underprices the IPO in order to maximize his wealth from selling shares at lockup expiration. First-day underpricing creates information momentum, i.e., it generates incremental comments and recommendations by research analysts, especially by non-lead underwriter analysts. This increased research coverage shifts the demand curve for the stock outwards, allowing the manager to sell shares at the lockup expiration at prices higher than he would otherwise be able to obtain. We test the model on a sample IPOs in the 1990s. We find that managerial share and option holdings are positively correlated with first-day underpricing and that higher first-day underpricing leads to more analyst research coverage. We also find that research coverage is positively correlated with stock price performance through the lockup expiration and with insider selling at the expiration of the lockup. Overall, the empirical results are consistent with the model.
Book Synopsis The IPO Lock-Up Period by : Eli Ofek
Download or read book The IPO Lock-Up Period written by Eli Ofek and published by . This book was released on 2008 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: After an initial public offering, most existing shareholders are subject to a lock-up period in which they cannot sell their shares for a prespecifed time. At the end of the lock-up, there is a permanent and large shift in the supply of shares. The lock-up expiration is a particularly interesting event to study because it is (i) completely known and observable, and (ii) potentially meaningful economically given the existing literature on supply shocks. This paper investigates volume and price patterns around this period, and documents several interesting results. Specifically, even though the event is totally anticipated, there is a 1% - 3% drop in the stock price, and a 40% increase in volume, when the lock-up ends. Various explanations are considered and rejected, suggesting a new anomalous fact against market efficiency. However, convincing evidence is provided which shows that this inefficiency is not exploitable, i.e., arbitrage is not violated. This aside, the evidence points to a downward sloping demand curve for shares, with the most likely explanation pointing to a permanent, long-run effect.
Book Synopsis Large the IPO Lock-Up Period by : Eli Ofek
Download or read book Large the IPO Lock-Up Period written by Eli Ofek and published by . This book was released on 2000 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: After an initial public offering, most existing shareholders are subject to a lock-up period in which they cannot sell their shares for a prespecified time. At the end of the lock-up, there is a permanent and large shift in the supply of shares. The lock-up expiration is a particularly interesting event to study because it is (i) completely known and observable, and (ii) potentially meaningful economically given the existing literature on supply shocks. This paper investigates volume and price patterns around this period, and documents several interesting results. Specifically, even though the event is totally anticipated, there is a 1% -- 3% drop in the stock price, and a 40% increase in volume, when the lock-up ends. Various explanations are considered and rejected, suggesting a new anomalous fact against market efficiency. However, convincing evidence is provided which shows that this inefficiency is not exploitable, i.e., arbitrage is not violated. This aside, the evidence points to a downward sloping demand curve for shares, with the most likely explanation pointing to a permanent, long-run effect.
Book Synopsis IPO Lockup Arrangements and Trading by Insiders by : Hafiz Hoque
Download or read book IPO Lockup Arrangements and Trading by Insiders written by Hafiz Hoque and published by . This book was released on 2009 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: We document that the average lockup of 365 days in the UK is higher than the US 180 days and many insiders trade within the lockup period. We find that prestigious underwriters and underwriter power (longer lockup) drive their trades. However, they sell in over-performing, large, and low institutional holding IPOs, but buy in underperforming IPOs with lower underpricing and proportion of shares locked. On the lockup expiry dates, there is significant price drop for early buy but not for early sell IPOs. We suggest that this early trading activity is pre-arranged with the underwriters to mitigate information asymmetries.
Book Synopsis Stock Price Reactions to IPO Lock-in Expiration: Evidence from the UK Market by : Zheng Luo
Download or read book Stock Price Reactions to IPO Lock-in Expiration: Evidence from the UK Market written by Zheng Luo and published by . This book was released on 2004 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
