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Trading By Directors Around The Expiry Of Lock In Agreements In Uk Ipos
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Book Synopsis Trading by Directors Around the Expiry of Lock-In Agreements in UK Ipos by : Susanne Espenlaub
Download or read book Trading by Directors Around the Expiry of Lock-In Agreements in UK Ipos written by Susanne Espenlaub and published by . This book was released on 2002 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: Most UK IPOs include lock-in agreements, which prevent the directors and other initial shareholders from selling their shares for a specified period after the IPO. Using a sample of 94 UK IPOs, we analyse their stock performance around the time of expiry of the lock-in agreement. We also look at the volume and pattern of directors' sales before and after the expiry of the lock-in agreement. We find that the average cumulative abnormal return around the lock-in expiry is negative and is significantly different from zero. However, examining stock performance around the lock-in expiry in the UK is not straightforward, as the expiry dates of two thirds of lock-in agreements are tied in with the announcement or publication of financial figures. This makes it difficult to estimate the expiry date. Also, the abnormal returns around the expiry may be influenced by the information effect of the earnings. We also examine the announcement effect of directors' sales on the stock performance. There is a substantial increase in share sales by the directors in the weeks immediately after the lock-in expiry. Surprisingly, the sub-sample of the companies that report directors' sales around the expiry date have positive average cumulative abnormal returns, albeit not statistically significant, whereas the sub-sample of companies without sales have negative returns. Finally, we investigate the likelihood of directors' sales occurring around the expiry of the lock-in agreement. We find that companies with a good stock performance before the expiry are more likely to have directors' sales. Overall, our results suggest that the directors' sales are not related to IPO signalling whereby firms would signal their quality using the duration of the lock-in agreement, the percentage of the shares locked-in and the level of IPO underpricing.
Book Synopsis The Expiry of Lock-In Agreements of UK Ipos by : Susanne Espenlaub
Download or read book The Expiry of Lock-In Agreements of UK Ipos written by Susanne Espenlaub and published by . This book was released on 2014 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: Most UK IPOs include lock-in agreements, which prevent the directors and other initial shareholders from selling their shares for a specified period after the IPO. Using a sample of 94 UK IPOs, we analyse their stock performance around the time of expiry of the lock-in agreements. We also look at the volume and pattern of directors' sales before and after the expiry of the lock-in agreement. We find that the average cumulative abnormal return around the lock-in expiry is negative and is significantly different from zero. However, examining stock performance around the lock-in expiry in the UK is not straightforward.The announcement effect of directors' sales on the stock performance is examined as well. The increase in stock sales by directors in the weeks immediately after the lock-in expiry is substantial. Interestingly and unexpectedly, the sub-sample of the companies that reported directors' sales in the period of interest had lower negative average cumulative abnormal returns, albeit not statistically significant, than the sub-sample of the companies that had no reported sales. Finally, the likelihood of directors' sales occurring around the expiry of the lock-in agreement is investigated.
Book Synopsis Lock-In Agreements in Venture Capital-Backed UK Ipos by : Susanne Espenlaub
Download or read book Lock-In Agreements in Venture Capital-Backed UK Ipos written by Susanne Espenlaub and published by . This book was released on 2014 with total page 73 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the impact of venture-capital (VC) backing on the characteristics of voluntary lock-in agreements entered into by the existing shareholders of UK IPOs, and on the abnormal returns around the expiry of the directors' lock-in agreements. Overall, we find that venture-capital backing acts as a complement rather than a substitute for lock-in contracts. We also examine the share-price performance of IPOs with and without VC backing around the time of the expiry of the lock-in agreements. We find that the cumulative average abnormal returns for the VC-backed stocks are lower for most of the short windows around the expiry date. We also examine some UK companies in more detail. Different motivations for the lock-in agreements are uncovered such as the founder's commitment not to exit the company (as he did in an earlier venture which subsequently failed) in one case, and the poor pre-IPO earnings performance in another case.
Book Synopsis Handbook of Research on IPOs by : Mario Levis
Download or read book Handbook of Research on IPOs written by Mario Levis and published by Edward Elgar Publishing. This book was released on 2013-11-29 with total page 599 pages. Available in PDF, EPUB and Kindle. Book excerpt: The chapters offer some important new insights into issues that will be of interest not only to the academic community but also to professionals involved in the preparation, structure and execution of such transactions, market regulators, and private a
Book Synopsis Advances in Corporate Finance and Asset Pricing by : Luc Renneboog
Download or read book Advances in Corporate Finance and Asset Pricing written by Luc Renneboog and published by Emerald Group Publishing. This book was released on 2006-03-02 with total page 569 pages. Available in PDF, EPUB and Kindle. Book excerpt: Incorporates estimation risk in portfolio choice and also covers a risk measure for retail investment products, understanding and exploiting momentum in stock returns. This book includes: Introduction - Corporate restructuring; mergers and acquisitions in Europe; and the performance of acquisitive companies in the US.
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 Lock-in Expiry and Directors' Trading Activity: an Empirical Investigation by : Marko Remenar
Download or read book Lock-in Expiry and Directors' Trading Activity: an Empirical Investigation written by Marko Remenar and published by . This book was released on 2001 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis IPO Lock-In Agreements in the UK. by : Susanne Espenlaub
Download or read book IPO Lock-In Agreements in the UK. written by Susanne Espenlaub and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: When a company offers shares in an initial public offering (IPO), existing owners often enter into lock-in agreements prohibiting them from selling shares for a specified period after the IPO. There is some recent U.S. evidence of predictable share-price movements at the time of expiry of these lock-in periods. Using a sample of 188 firms, 83 classified as high-tech and 105 others, that went public on the London Stock Exchange (LSE) during 1992-1998, we focus on the characteristics of lock-in agreements in the UK and on the behavior of stocks returns around the lock-in expiry date. We find that the lock-in contracts of LSE-listed firms are much more complex, varied and diverse than U.S. contracts, which usually standardize the lock-in period at 180 days after the IPO. We also find evidence of negative abnormal stock returns at and around lock-in expiry of similar magnitude to those reported in U.S. studies. However, these abnormal returns are typically not statistically significant. While the deterioration in stock returns immediately around the expiry date appears to be much more particularly pronounced for high-tech stocks than for others, the differences in performance are not statistically significant.
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 Lock-In Agreements in the UK by : Susanne Espenlaub
Download or read book Lock-In Agreements in the UK written by Susanne Espenlaub and published by . This book was released on 2014 with total page 34 pages. Available in PDF, EPUB and Kindle. Book excerpt: When a company offers shares in an Initial Public Offering (IPO), insiders typically undertake a lock-in agreement that prohibits them from selling their shares for a specified period of time after the IPO. Recent evidence from the US has shown that there are predictable share price movements at the time of expiry of these lock-in periods thus challenging the Efficient Markets Hypothesis. Using a sample of 188 firms that went public on the London Stock Exchange (LSE) during 1992-1998, we focus on the characteristics of the lock-in agreements in the UK and also on the share price behaviour of the firms around the lock-in expiry date. We find that the lock-in contracts of the LSE listed firms are much more complex, varied and diverse as compared to the US contracts, which are usually standardised at 180 days after the IPO. We also find evidence of negative share price movements at and around the lock-in expiry dates thus providing further support to the US evidence. The deterioration in stock returns around the expiry date is particularly pronounced for high-tech companies.
Book Synopsis INITIAL PUBLIC OFFERINGS - 2ND EDITION by : Arif Khurshed
Download or read book INITIAL PUBLIC OFFERINGS - 2ND EDITION written by Arif Khurshed and published by Harriman House Limited. This book was released on 2019-02-18 with total page 147 pages. Available in PDF, EPUB and Kindle. Book excerpt: A fully revised and updated second edition of the essential guide that tells you everything you want to know about IPOs in the UK. An initial public offering (IPO) - the occasion when a firm's shares are issued to the public for the first time - is one of the most exciting events in the life of a company, providing new opportunities for the business, its managers and for investors. IPOs attract a lot of attention from stock market researchers, academics and investors seeking to understand more about how they work and how the shares of IPO companies perform once they are listed. In this second edition of Initial Public Offerings, Arif Khurshed delves into the history of IPOs on the London Stock Exchange, explains the mechanics of how IPOs are arranged and how they are priced, and provides an analysis - with detailed but lucid reference to past academic studies - of how the shares of IPO companies perform in the short and long term. The book provides valuable insight into many fundamental IPO matters, including: - the different methods of flotation that are used, - the alternative ways in which IPO shares are priced, - how common it is for IPO shares to over or underperform, - the survival of IPO firms once they are listed. There are also detailed case studies of the short- and long-run performance of a number of high-profile IPOs, including those of Facebook, Alibaba and Royal Mail. If you are an academic, finance professional or serious investor looking to broaden your knowledge of stock market flotations then you will find Initial Public Offerings to be an indispensable guide.
Book Synopsis IPO Lock-in Agreements Expiration and Characteristics in the UK Evidences by : Dongdong Sun
Download or read book IPO Lock-in Agreements Expiration and Characteristics in the UK Evidences written by Dongdong Sun and published by . This book was released on 2004 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Relationship of Underpricing IPOs and Lock Up Agreements by : Wen Ding
Download or read book Relationship of Underpricing IPOs and Lock Up Agreements written by Wen Ding and published by . This book was released on 2000 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Lock-in Agreements in Venture Capital Backed in UK Ipos by : Susanne Espenlaub
Download or read book Lock-in Agreements in Venture Capital Backed in UK Ipos written by Susanne Espenlaub and published by . This book was released on 2002 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Shareholder Lock-in Contracts by : Peter-Paul Angenendt
Download or read book Shareholder Lock-in Contracts written by Peter-Paul Angenendt and published by . This book was released on 2005 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Book Synopsis Investment Intelligence from Insider Trading by : H. Nejat Seyhun
Download or read book Investment Intelligence from Insider Trading written by H. Nejat Seyhun and published by MIT Press. This book was released on 2000-02-28 with total page 452 pages. Available in PDF, EPUB and Kindle. Book excerpt: Learn how to profit from information about insider trading. The term insider trading refers to the stock transactions of the officers, directors, and large shareholders of a firm. Many investors believe that corporate insiders, informed about their firms' prospects, buy and sell their own firm's stock at favorable times, reaping significant profits. Given the extra costs and risks of an active trading strategy, the key question for stock market investors is whether the publicly available insider-trading information can help them to outperform a simple passive index fund. Basing his insights on an exhaustive data set that captures information on all reported insider trading in all publicly held firms over the past twenty-one years—over one million transactions!—H. Nejat Seyhun shows how investors can use insider information to their advantage. He documents the magnitude and duration of the stock price movements following insider trading, determinants of insiders' profits, and the risks associated with imitating insider trading. He looks at the likely performance of individual firms and of the overall stock market, and compares the value of what one can learn from insider trading with commonly used measures of value such as price-earnings ratio, book-to-market ratio, and dividend yield.
