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The Choice and Role of Lockups in IPOs: Evidence from Heterogeneous Lockup Agreements
Financial Markets, Institutions & Instruments, Volume: 20, Issue: 5, Pages: 191 - 220
Swansea University Author:
Hafiz Hoque
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DOI (Published version): 10.1111/j.1468-0416.2011.00169.x
Abstract
This paper analyses heterogeneous lockup agreements from the London Stock Market. With hand-collected data, I compare and contrast absolute-date lockups with the relative-date lockups and single lockups versus staggered lockups. This paper tests several potential explanations for the choice of locku...
| Published in: | Financial Markets, Institutions & Instruments |
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| ISSN: | 0963-8008 |
| Published: |
©2011 New York University Salomon Center and Wiley Periodicals, Inc.
2011
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| Online Access: |
Check full text
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| URI: | https://cronfa.swan.ac.uk/Record/cronfa6921 |
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| Abstract: |
This paper analyses heterogeneous lockup agreements from the London Stock Market. With hand-collected data, I compare and contrast absolute-date lockups with the relative-date lockups and single lockups versus staggered lockups. This paper tests several potential explanations for the choice of lockup contracts: (i) information asymmetry, (ii) signaling, (iii) agency problem, and (iv) certification. I find strong evidence for information asymmetry and certification (VC and prestigious underwriters) and partial support for agency explanation for the choice of lockups. The insider selling activity and lockup expiration returns are also consistent with asymmetric information, certification and agency hypothesis. |
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| Keywords: |
Heterogeneous IPO lockups;insider trades;information asymmetry;London Stock Exchange |
| College: |
Faculty of Humanities and Social Sciences |
| Issue: |
5 |
| Start Page: |
191 |
| End Page: |
220 |