Why Do insiders sell shares following IPO lockups?
Journal
Financial Management
Journal Volume
41
Journal Issue
4
Pages
813-847
Date Issued
2012-12
Author(s)
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. © 2012 Financial Management Association International.
Subjects
LONG-RUN PERFORMANCE; INITIAL PUBLIC OFFERINGS; EARNINGS MANAGEMENT; INFORMATION-CONTENT; MARKET; BANKRUPTCY; EXPIRATION; COMPANIES; DECISION; RETURNS
Publisher
WILEY
Type
journal article