Shareholder lock-in contracts: share price and trading volume effects at the lock-in expiryAngenendt, Peter-Paul, Marc Goergen and Luc Renneboog () No 115, Discussion Paper from Tilburg University, Center for Economic Research Abstract: This paper unveils the diversity in lock-in agreements of firms listed on the Nouveau Marche stock exchange in France. We give the main economic reasons why shareholders adopt lock-in agreements that are more stringent than legally required. We relate the abnormal returns and the abnormal volume at the expiry dates of the different types of lock-in contracts to the degree of underpricing, venture-capitalist reputation and underwriter reputation. Abnormal returns and trading volume increase at the lock-in expiry; this is especially pronounced at the expiry dates of insider lock-in contracts as insiders are legally required to be locked-in. We do not find significant abnormal returns at the expiries of VC contracts, even though trading volume increases at their lock-in expiry. There is also no evidence of a positive (negative) relation between abnormal returns (abnormal volume) and more stringent lock-in contracts. Lock-in contracts and the degree of underpricing are complementary signalling devices. Keywords: lock-in agreements; lock-up contracts; lock-in expiry; lock-up expiry; signaling; underwriter reputation; underpricing (search for similar items in EconPapers) Downloads: (external link) Related works: Access Statistics for this paper More papers in Discussion Paper from Tilburg University, Center for Economic Research |
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