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Why Do Insiders Sell Shares Following IPO Lockups?

Year: 2012

Type: article

Abstract: We examine long run returns subsequent to the lockup expiration of firms having gone public. We find that returns are negatively associated with abnormal selling by senior executives but unrelated to selling by other insiders. Our results suggest that even though lockup expirations provide an initial opportunity for insiders to diversify their holdings by selling a firm's shares, sales by senior executives are still motivated in part by private information. Sales by other insiders, on the other hand, are consistent with portfolio diversification.

Source: Financial Management

DOI: 10.1111/j.1755-053x.2012.01217.x

Authors: Hsuan‐Chi Chen, Sheng‐Syan Chen, Chia‐Wei Huang

Institutions: University of New Mexico, National Taiwan University, Yuan Ze University

Language: English

Topic: Financial Markets and Investment Strategies

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W2063973564

FWCI: 4.254

Cites: 67

Cited by: 29

Related to: 10