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The Choice and Role of Lockups in IPOs: Evidence from Heterogeneous Lockup Agreements

Hafiz Hoque Orcid Logo

Financial Markets, Institutions & Instruments, Volume: 20, Issue: 5, Pages: 191 - 220

Swansea University Author: Hafiz Hoque Orcid Logo

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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...

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Published in: Financial Markets, Institutions & Instruments
ISSN: 0963-8008
Published: ©2011 New York University Salomon Center and Wiley Periodicals, Inc. 2011
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URI: https://cronfa.swan.ac.uk/Record/cronfa6921
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last_indexed 2018-02-09T04:34:34Z
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spelling 2013-11-05T11:40:57.1935614 v2 6921 2012-01-27 The Choice and Role of Lockups in IPOs: Evidence from Heterogeneous Lockup Agreements 06d1239b4524fff9c0a0f52a2a368910 0000-0002-4354-3895 Hafiz Hoque Hafiz Hoque true false 2012-01-27 BAF 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. Journal Article Financial Markets, Institutions & Instruments 20 5 191 220 ©2011 New York University Salomon Center and Wiley Periodicals, Inc. 0963-8008 Heterogeneous IPO lockups;insider trades;information asymmetry;London Stock Exchange 31 12 2011 2011-12-31 10.1111/j.1468-0416.2011.00169.x http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0416.2011.00169.x/abstract COLLEGE NANME Accounting and Finance COLLEGE CODE BAF Swansea University 2013-11-05T11:40:57.1935614 2012-01-27T16:52:58.2300000 Faculty of Humanities and Social Sciences School of Management - Accounting and Finance Hafiz Hoque 0000-0002-4354-3895 1
title The Choice and Role of Lockups in IPOs: Evidence from Heterogeneous Lockup Agreements
spellingShingle The Choice and Role of Lockups in IPOs: Evidence from Heterogeneous Lockup Agreements
Hafiz Hoque
title_short The Choice and Role of Lockups in IPOs: Evidence from Heterogeneous Lockup Agreements
title_full The Choice and Role of Lockups in IPOs: Evidence from Heterogeneous Lockup Agreements
title_fullStr The Choice and Role of Lockups in IPOs: Evidence from Heterogeneous Lockup Agreements
title_full_unstemmed The Choice and Role of Lockups in IPOs: Evidence from Heterogeneous Lockup Agreements
title_sort The Choice and Role of Lockups in IPOs: Evidence from Heterogeneous Lockup Agreements
author_id_str_mv 06d1239b4524fff9c0a0f52a2a368910
author_id_fullname_str_mv 06d1239b4524fff9c0a0f52a2a368910_***_Hafiz Hoque
author Hafiz Hoque
author2 Hafiz Hoque
format Journal article
container_title Financial Markets, Institutions & Instruments
container_volume 20
container_issue 5
container_start_page 191
publishDate 2011
institution Swansea University
issn 0963-8008
doi_str_mv 10.1111/j.1468-0416.2011.00169.x
publisher ©2011 New York University Salomon Center and Wiley Periodicals, Inc.
college_str Faculty of Humanities and Social Sciences
hierarchytype
hierarchy_top_id facultyofhumanitiesandsocialsciences
hierarchy_top_title Faculty of Humanities and Social Sciences
hierarchy_parent_id facultyofhumanitiesandsocialsciences
hierarchy_parent_title Faculty of Humanities and Social Sciences
department_str School of Management - Accounting and Finance{{{_:::_}}}Faculty of Humanities and Social Sciences{{{_:::_}}}School of Management - Accounting and Finance
url http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0416.2011.00169.x/abstract
document_store_str 0
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description 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.
published_date 2011-12-31T03:08:33Z
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score 11.012678

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