Keywords
initial public offerings, lockup
Abstract
Initial public offering (IPO) lockup agreements prevent insider sale of shares for specified periods of time (often 180 days). This study investigates share price reactions at and around the time the lockup agreements expire. Results indicate statistically significant negative abnormal returns in the event window surrounding the expiration date. The results are consistent with informational asymmetries and decreasing incentive alignment between insiders and general shareholders. In addition, multivariate analysis identifies several variables that help explain these abnormal returns.
Original Publication Citation
Market Reaction to the Expiration of IPO Lockup Provisions, with Dave Carter, Steve Christophe, and Kim Key, Managerial Finance, Vol. 30, No. 2, 2004, 87-103.
BYU ScholarsArchive Citation
Brau, James C.; Carter, David A.; Christophe, Stephen E.; and Key, Kimberly G., "Market Reaction to the Expiration of IPO Lockup Provisions" (2004). Faculty Publications. 9161.
https://scholarsarchive.byu.edu/facpub/9161
Document Type
Peer-Reviewed Article
Publication Date
2004
Publisher
Managerial Finance
Language
English
College
Marriott School of Business
Department
Finance
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