The 180-day lock-up period and insiders’ equity selling |
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Authors: | Ayi Ayayi |
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Institution: | 1. School of Business Management, Ryerson University, 350 Victoria Street, M5B 2K3, Toronto, Ontario, Canada
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Abstract: | This article examines how insiders who provide capital and advisory services determine the proportion of common stock to be
sold during an IPO and shows that, after the IPO, a high-value investee's insiders continue to hold a significant fraction
of its equity stake relative to a low-value investee's insiders. The result is consistent with the signaling of the insider
trader reputation, the lock-up argument, and the only least-cost separating equilibrium that survives the intuitive criterion. |
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Keywords: | |
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