VENTURE CAPITAL AND IPO LOCKUP EXPIRATION: AN EMPIRICAL ANALYSIS

Most initial public offerings (IPOs) feature “lockup” agreements, which bar insiders from selling the stock for a set period following the IPO, usually 180 days. We examine stock price behavior in the period surrounding lockup expiration for a sample of 2,529 firms from 1988 to 1997. We find that lockup expirations are, on average, associated with significant and negative abnormal returns, but the losses are concentrated in firms with venture capital backing. For the venture‐capital‐backed group, the largest losses occur for high‐tech firms and firms with the greatest post‐IPO stock price increases, the largest relative trading volume in the period surrounding expiration, and the highest quality underwriters. JEL classification: G14, G24     

The FTC's handling of puffery and other selling claims made “by implication”

The Federal Trade Commission's handling of alleged false advertising representations that are made by implication is examined. Alleged false advertising presentations are held to be implied to the public by the advertiser even though they are not literally stated in his advertisement. The FTC has extended its reach over this kind of misrepresentation in recent years. Cases for 1970–76 are identified, and a catalog is developed of ten types of implications that have been attacked as deceptive during this period. Some, such as the Expansion Implication, are types established as deceptive in earlier years; others, such as the Reasonable Basis Implication, were not attacked prior to the 1970s. Some types, such as the Uniqueness Implication, have been given considerable publicity; others, such as the Inconspicuous Context Implication, are newly categorized in this paper. The consequences of FTC's identification of these types of implications, and of its growing attention to the possibility of misrepresentation by implication, are discussed in detail. A prediction is offered that attention to implications will continue to increase for some time in the future. Puffery is discussed as a category which the FTC might recognize in the future as a type of implied misrepresentation; a rationale is offered for regulating such claims. The role of the researcher is examined, using the assumption that greater attention to misrepresentation that extends beyond a message's literal meaning will produce a greater need for research. The researcher will have attractive opportunities for such work, but will have to confront the problem that playing an advocacy role in legal proceedings may involve significant conflicts with the impartial role that is appropriate for the academic researcher.     

Nonlinear Purchasing Power Parity under the Gold Standard

Hegwood and Papell (2002) conclude on the basis of analysis in a linear framework that long-run purchasing power parity (PPP) does not hold for 16 real exchange rate series, which were analyzed in Diebold. I lusted, and Rush (1991) for the period 1792-1913 under the Gold Standard. Rather, PPP deviations are mean-reverting to a changing equilibrium—a quasi PPP (QPPP) theory. We analyze the real exchange rate adjustment mechanism for their data set assuming a nonlinear adjustment process allowing for both a constant and a mean shifting equilibrium. Our results confirm that real exchange rates at that time were stationary, symmetric, nonlinear processes that revert to a nonconstant equilibrium rate. Speeds of adjustment were much quicker when breaks were allowed.     

Dimensions of Destination Images—The Relationship Between Specific Sites and Overall Perceptions of Place: The Example of Dubai Creek and “Greater Dubai”

ABSTRACT

The current research study attempted to identify to what extent the overall, generic image of a place is determined by, or related to, site specific locations within the destination. A series of answers to open-ended questions were elicited from 102 respondents in Dubai, United Arab Emirates. The data were analyzed using thematic and textual analysis using the neural network program CatPac?, a principal components analysis of dichotomous variables and Spearman rho tests of frequency ranking. The results from this study imply that two homogeneities of image are able to exist simultaneously in the visitors' minds, even though little correlation appears to exist between the images.