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:
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.
Download or read book Insider Trading Pricing and the Long Run Performance of IPOs written by Patrick Sentis and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This article empirically examines the relationship between insider (entrepreneurs, and venture capitalists) trading and underpricing and long-run performance for a sample of 120 initial public offerings (IPOs) that took place on the Nouveau Marché in France during the high-tech bubble. We hypothesize that insiders were better informed than the market about the future prospect of the firms, particularly during the high-tech bubble characterized by strong information asymmetry. Trading activity was measured at the IPO date and over a three-year period after this date. We find no evidence suggesting that entrepreneurs and venture capitalists knowingly issue overvalued equity at the IPO date. However, there is weak, but statistically significant, evidence that suggests that entrepreneurs and venture capitalists acquire private information during the first years of flotation and have the ability to take advantage of it by selling overvalued equity. Both these insiders seem to be the best informed on the future value of the firm. However, changes in ownership of banks and other shareholders are not followed by significant change in the firm's long term value.
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.
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.
Download or read book Lockup Provision and Institution Investors Trading written by Po-Kai Huang and published by . This book was released on 2015 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt: The lock-up provision conveys important information about the ex-ante risk of an IPO. Using a unique trading data in pre-IPO market and a unique data of exact days of withdrawing lockup shares, we are able to test the trading behavior of institutional investors around the lockup announce day and expiration day using a sample of 218 IPOs firms from 2005 to 2011 in Taiwan. We are able to find that the abnormal returns of institutional investors are insignificant around the lockup announce day. Second, the relationship between the net buying and selling of institutional investor and cumulative returns around announce day is insignificant. Also, the relationship between lockup ratio and institutional investor trading around, and the relationship between the lockup ratio and initial return of IPOs are all insignificant. This implies that announcement of lockup ratio carries no information.We then examine whether the trading of institutional investors around the withdrawing of lockup shares affects long term performance. We do find that there is a positive relationship between foreign institution trading and ROE for one year after IPO. It implies that the trading behavior of institution investors around lockup expiration day contains information of long term performance.
Download or read book Does Insider Trading Impair Market Liquidity Evidence from IPO Lockup Expirations written by Charles Cao and published by . This book was released on 2003 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: We test the hypothesis that insider trading impairs market liquidity, by analyzing intraday trades and quotes around 1,497 IPO lockup expirations in the period 1995-1999. We find that, while lockup expirations are associated with considerable insider trading for some IPO firms, they have little effect on effective spreads. By contrast, two other liquidity measures, quote depth and trading activity, improve substantially. In the 23% of lockup expirations where insiders disclose share sales, spreads actually decline. These findings indicate that a large body of well-informed, blockholding insider traders can enter a market from which they had previously been absent, and substantially change trading volume and share price, without impairing market liquidity.
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.
Download or read book The Oxford Handbook of Entrepreneurial Finance written by Douglas Cumming and published by OUP USA. This book was released on 2012-03-22 with total page 937 pages. Available in PDF, EPUB and Kindle. Book excerpt: Provides a comprehensive picture of issues dealing with different sources of entrepreneurial finance and different issues with financing entrepreneurs. The Handbook comprises contributions from 48 authors based in 12 different countries.
Download or read book Insider Trading Subsequent to Initial Public Offerings written by Alon Brav and published by . This book was released on 2000 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores the role of investment bankers and lock-up provisions in the market for new equity issues. In a sample of 1,948 IPOs, we find support for the notion that lock-ups serve as commitment mechanisms at the time of the IPO. Insiders of firms that are associated with greater informational asymmetries lock-up their shares for a longer period of time. We also find that underpricing is higher for firms that lock-up their shares for a longer period of time or lock-up a larger fraction of their shares. The average abnormal return at lock-up expiration is -1.2% and is larger for firms that lock-up a greater fraction of their shares and firms that are backed by venture capitalists. This price drop is inconsistent with rational expectations on the part of investors. Finally, we find that earnings forecasts made by both affiliated and unaffiliated analysts are more optimistic around lock-up expiration.
Download or read book The Phenomenon of IPO Underpricing in the European and U S Stock Markets written by Oliver Reiche and published by GRIN Verlag. This book was released on 2013-06-13 with total page 105 pages. Available in PDF, EPUB and Kindle. Book excerpt: Master's Thesis from the year 2013 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 2.3, University of Duisburg-Essen, course: Energy & Finance, language: English, abstract: The Initial Public Offering (IPO) which marks one the most important events of a company basically aims to generate maximum proceeds by selling company’s shares to investors. Nevertheless, the shares they sell often seem to be underpriced, insofar that the price significantly soars on the first trading day. Consequently, the company generates fewer proceeds and, hence “leaves money on the table.” Since the very first detection of this phenomenon in the United States in 1969, several subsequent studies documented the existence of worldwide IPO underpricing nowadays. Considering that underpricing is costly for the company, a question arises why, therefore, despite the fact that the companies “leave money on the table”, they do not try to avoid this by setting the issuing price on the very high? One of the most striking features of this question is that it had inspired many researchers who tried to explain in various models why IPOs are generally underpriced. Besides, a lot of theoretical explanations concerning this phenomenon have been given by now; however, no common sense has been so far developed.[...]
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.
Download or read book Initial Public Offerings written by Michelle Lowry and published by . This book was released on 2017 with total page 166 pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of this monograph is to provide an overview of the IPO literature since 2000. The fewer numbers of companies going public in recent years has raised many questions regarding the IPO process, in both academic and regulatory circles. As we all strive to understand these changes in the market, it is especially important to understand the dynamics underlying the IPO process. If the process of going public is too costly or the IPO mechanism is plagued by too many conflicts of interest among the various intermediaries, then private companies may rationally choose other methods of raising capital. In a related vein, it is imperative that new regulations not be based on research focusing solely on large, more mature firms. Newly public firms have unique characteristics, and an increased understanding of such issues will contribute positively to well-functioning public markets and further growth of the entrepreneurial sector. We also provide a detailed guide to researchers on how to obtain a research-quality sample of IPOs, from standard data sources. Related to this, we tabulate important corrections to these standard data sources.
Download or read book A Survey of the European IPO Market written by and published by CEPS. This book was released on 2006 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt:
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
Download or read book The IPO Decision written by Jason Draho and published by Edward Elgar Publishing. This book was released on 2004-01-01 with total page 400 pages. Available in PDF, EPUB and Kindle. Book excerpt: Annotation Initial public offerings (IPOs) garnered unprecedented positive attention in the 1990s for their spectacular returns and central role in entrepreneurial activity. Subsequent revelations of unscrupulous IPO allocation and promotion practices cast a less fa.
Download or read book Cornerstone Investors written by Philippe Espinasse and published by Hong Kong University Press. This book was released on 2018-01-04 with total page 257 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this groundbreaking guide, former investment banker Philippe Espinasse explains the process of gathering cornerstone investors in connection with IPOs and other equity offerings. Using his trademark simple and jargon-free language, he details the targeting strategies, documentation, marketing, and allocation of shares and other securities to these reference shareholders, and analyses why and how they make or break today’s new listings across Asia’s key markets. This essential guide—and the first of its kind—contains key information on the legal framework for cornerstone investors in Hong Kong, Malaysia, and Singapore, and offers practical advice on how best to structure and conduct a cornerstone investor offering. It also discusses some of the more controversial issues associated with the practice of cornerstone investment and includes many real-life examples of cornerstone deals, sample documents, cornerstone investor profiles, an investor target list, and a comprehensive glossary. ‘There is no better person to shed light on the opaque world of cornerstone investing in Asian IPOs. Philippe Espinasse writes clearly, substantively, and expertly.’ —Jasper Moiseiwitsch, Asia companies and markets news editor, Financial Times ‘As engaging as it is informative. Espinasse has cut through legalese and jargon to create a pragmatic overview of this widely misunderstood, and distinctly Asian, investment banking concept. Packed with recent examples, this book doesn’t just teach you about cornerstones; it also provides an insider’s take of the region’s capital markets hubs.’ —Danielle Myles, capital markets editor, The Banker ‘Cornerstone investors have taken centre stage in Hong Kong’s IPO market. This book is needed now more than ever.’ —Matthew Thomas, Asia bureau chief, Euromoney Institutional Investor
